How Should the Balances of Progress Billings and Construction in Progress

question 36

Multiple Choice

How should the balances of Progress Billings and Construction in Progress be shown at reporting dates prior to the completion of a long-term contract?

• A) Progress Billings as income,Construction in Progress as inventory
• B) Net,as income from construction if credit balance,and loss from construction if debit balance
• C) Progress Billings as deferred income,Construction in Progress as a current asset
• D) Net,as a current asset if debit balance and current liability if credit balance

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Definitions:

Process Driven Organizations

Companies that prioritize systematic procedures and workflows to achieve their objectives.

Process

A series of actions or steps taken in order to achieve a particular end.

Resource Inputs

Resources or materials used in the production of goods and services.

Organizational Outputs

The results, products, or services generated by an organization through its operations and activities.