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Under the percentage-of-completion method, how should the balances of Billings on Construction in Process and Construction in Process be reported prior to the completion of a long-term contract?

User JustLudo
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Given Information:

>Net, as income from construction if credit balance, and loss from construction if debit balance.

>Net, as a current asset if a debit balance, and as a current liability if a credit balance.

>Progress billings as deferred income, construction in progress as a deferred expense.

>Progress billings as income, construction in process as inventory.

Answer:

Net, as a current asset if a debit balance, and as a current liability if a credit balance.

Step-by-step explanation:

In net the balance sheets of accruals and investment should be shown as current assets when a debit balance is established and as a current liability when a credit balance is established.

Net is typically the sum of positive and negative sums when it comes to accounting. For example, the net sales amount is the combination of a positive turnover and some negative amounts, including sales returns, sales allowances and discounts.

The accrued investment income is called a capital asset as the sum is generally expected to be published in its balance sheet within one year.

User JonC
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