Under the Percentage-Of-Completion Method, How Should Earned but Unbilled Revenues $\bold{\text{contract asset/liability}}$

question 109

Multiple Choice

Under the percentage-of-completion method, how should earned but unbilled revenues on a long-term contract be disclosed on the statement of financial position?

• A) as \(\bold{\text{contract asset/liability}}\) in the current asset section
• B) as \(\bold{\text{contract asset/liability in}}\) the noncurrent asset section
• C) as a receivable in the noncurrent asset section
• D) in a note to the financial statements until the customer is formally billed for the portion of work completed

Identify assets likely to be reported at historical cost on the balance sheet.

Understand the concept and practical implications of liabilities in financial contexts.

Grasp the characteristics that define an economic resource as an asset.

Learn the importance of fair value measurements and GAAP disclosures.

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Definitions:

Arginine

An essential amino acid that plays an important role in protein synthesis and various metabolic pathways in the body.

Aspartic Acid

An amino acid with a carboxylic acid side chain, important for enzyme activity and neurotransmission, symbol Asp or D.

Neutral Form

Refers to the state of a molecule when it is not bearing a positive or negative charge, typically in the context of pH-dependent forms of molecules in solutions.

L-Serine

An α-amino acid important in biosynthesis, which serves as a building block for proteins.