Under the Completed Contract Method of Income Recognition on Long-Term

question 120

Multiple Choice

Under the completed contract method of income recognition on long-term construction contracts:

• A) The balance in the "Construction-in-Progress" account is reported on the balance sheet as a long-term asset until the date of completion.
• B) The accumulated amount in the "Construction-in-Progress" account is essentially the amount of cost of goods sold at completion date.
• C) Income is accumulated in the "Construction-in-Progress" account.
• D) "Construction-in-Progress" is reduced when billings are collected.

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Definitions:

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