#14 How should the balances of Progress Billings and Construction in Process be shown at reporting dates prior to the completion of a long-term contract? Question 14 options: a Net balance, as income from construction if credit balance, and loss from construction if debit balance b Progress Billings as deferred income, Construction in Progress as a deferred expense c Progress Billings as income, Construction in Process as inventory d Net balance, as a current asset if debit balance, and current liability if credit balance

#14 How should the balances of Progress Billings and Construction in Process be shown at reporting dates prior to the completion of a long-term contract? Question 14 options: a Net balance, as income from construction if credit balance, and loss from construction if debit balance b Progress Billings as deferred income, Construction in Progress as a deferred expense c Progress Billings as income, Construction in Process as inventory d Net balance, as a current asset if debit balance, and current liability if credit balance

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter9: Operating Activities

Section: Chapter Questions

Problem 3QE

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David Mendez Under the percentage-of-completion method, how should the balances of progress billings and construction in process be disclosed in the financial statements prior to the completion of the contract? net, as income from construction if a credit balance, and loss from construction if a debit balance progress billings as deferred income, construction in progress as a deferred expense net, as a current asset if a debit balance, and a current liability if a credit balance progress billings as income, construction in process as inventory
33. Entity A enter into a long-term contract to provide service. The outcome of the transaction can be estimated reliably and the progress on the contract can be measured with sufficient reliability. According to PPSAS, how should entity A recognize revenue from the contract? On a straight-line basis over the contract term By reference to the stage of completion of the contract at the reporting date Full recognition of contract price upon completion of the contract Only to the extent of costs that are expected to be recovered.
1. All of the following accounts are impliedly contained in the account Construction in Progress except: A. Costs incurred to date B. Contract Revenue to date C. Gross Profit to date D. Progress Billings to date 2. S1: Zero Profit Method in revenue recognition principle recognizes income upon the completion a construction contractS2: A contract asset exists when Contract revenue to date is less than progress billings to date. A. Both are true B. Both are false C. S1 True D. S2 True
Under the completed-contract method, Question 16 options: a revenue, cost, and gross profit are recognized at the time the contract is completed. b revenue and cost are recognized during the production cycle, but gross profit recognition is deferred until the contract is completed. c revenue, cost, and gross profit are recognized during the production cycle. d None of these answers are correct.
1. When outcome of a construction contract is estimated reliably, contract revenue and contract costs associated with the construction contract should be recognized using * A. cost recovery method B. percentage of completion method C.gross profit method D.zero profit method.
In accounting for a long-term construction contract using the percentage of completion method, the progress billings on contract account is a * A. noncurrent liability B. revenue account C. contra noncurrent liability D.contra current asset account
7 What will a contingency note contain? Review Later A circumstance where a company may have a liability A disclosure of future contracts to be performed A disclosure of all future commitments of the company A set of criteria required to be able to recognize revenue
All of the following accounts are impliedly contained in the account "Construction in Progress” except: A. Progress Billings to date B. Costs incurred to date C. Contract Revenue to date D. Gross Profit to date S1: Zero Profit Method in revenue recognition principle recognized income upon the completion a construction contract S2: A contract asset exists when Contract revenue to date is less than progress billings to date A. Both are true B. Both are false C. s1 True D. S2 True
27. The amount of asset cost assigned as an expense to a particular period is called: a. Provisions b. Reserves c. Depreciation d. Loss of credit
Which statement is true when the outcome of construction contract cannot be estimated reliably? a. Contract costs shall be recognized as an expense in the period when incurred. b. Revenue shall be recognized only to the extent of contract costs incurred that is probable will be recoverable c. All of these statements are true. d. An expected loss on the construction contract shall be recognized as an expense immediately.
31 - Which of the following is sufficient to record the expense ? a) Payment in the following period B) Payment NS) to have come true D) Originating from the production of goods and services TO) Payment by the end of the term
S1: Zero Profit Method in revenue recognition principle recognizes income upon the completion a construction contractS2: A contract asset exists when Contract revenue to date is less than progress billings to date Both are true Both are false S1 True S2 True explain and cite your source.

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a	Net balance, as income from construction if credit balance, and loss from construction if debit balance
b	Progress Billings as deferred income, Construction in Progress as a deferred expense
c	Progress Billings as income, Construction in Process as inventory
d	Net balance, as a current asset if debit balance, and current liability if credit balance