Final answer:
Billings for long-term construction-type contracts are accumulated in a Billings account under both the Percentage of Completion and Completed Contract accounting methods. The Billings account tracks amounts billed to customers and is used in both methods to reflect billing based on project progress or milestones. The correct answer is option c. Both Percentage of Completion and Completed Contract.
Step-by-step explanation:
In accounting for long-term construction-type contracts, billings are recorded in a Billings account. This account is used to track the amounts billed to customers on long-term contracts and is part of the accounting process for these types of contracts. The Billings account is not directly tied to the recognition of revenue, but rather to the invoicing of the work performed or milestones reached in the contract.
When it comes to the question of under which methods the Billings account is accumulated, the correct answer is c. Both Percentage of Completion and Completed Contract methods. These are the two primary methods used for recognizing revenue in long-term construction contracts, and both involve billing the customer based on the progress of the project. The Percentage of Completion method involves recognizing revenue and costs based on the progress towards completion of a contract. As progress is made, billings occur, and the Billings account accumulates these amounts. On the other hand, the Completed Contract method delays revenue recognition until the project is completed or substantially completed, but this method still involves billings throughout the project duration, which means the Billings account is used to accumulate these billings as well.