Choose the Correct Statement Concerning the Percentage-Of-Completion Method of Accounting

question 18

Multiple Choice

Choose the correct statement concerning the percentage-of-completion method of accounting for a firm with only one current long-term construction contract in process (assume no loss is projected) :

• A) The net current asset account (net of construction- in- process, and billings) exceeds that same account under the completed contract method.
• B) If the construction- in- process account exceeds the billings account, total costs to date must exceed total billings to date.
• C) If the construction- in- process account exceeds the billings account, total costs to date must exceed total cash received on the contract to date.
• D) It is possible to have both a net current asset account and a net current liability account in this situation.

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Definitions:

Dermatitis

A general term for inflammation of the skin, resulting in redness, itching, and sometimes blistering.

Atopic

Related to atopy, a genetic predisposition toward developing allergic hypersensitivity reactions such as eczema, asthma, or hay fever.

Onycholysis

The separation of the nail from the nail bed, a symptom that can be caused by trauma, infection, or systemic disease.

Nail

Keratinous extensions at the end of fingers and toes, serving protection and enhancing tactile function.