An excess of Construction in Progress over Partial Billings for long-term contracts accounted for on the percentage-of-completion method should be shown as a
A)current asset
B)current liability
C)long-term asset
D)long-term liability

Question

Quizplus · Accepted Answer

When Construction in Progress exceeds Partial Billings for long-term contracts accounted for on the percentage-of-completion method, the excess is considered an asset because it represents costs incurred plus recognized profits not yet billed. It is classified as a current asset because it is expected to be billed and turned into cash within one year or the operating cycle, whichever is longer.

An Excess of Construction in Progress Over Partial Billings for Long-Term