Under the percentage-of-completion method, how should earned but unbilled revenues on a long-term contract be disclosed on the statement of financial position?
A) as $\bold{\text{contract asset/liability}}$ in the current asset section
B) as $\bold{\text{contract asset/liability in}}$ the noncurrent asset section
C) as a receivable in the noncurrent asset section
D) in a note to the financial statements until the customer is formally billed for the portion of work completed

Question

Quizplus · Accepted Answer

Under the percentage-of-completion method, earned but unbilled revenues on a long-term contract should be recognized as a contract asset or liability in the current asset section. This represents the portion of the work that has been completed but not yet billed to the customer. Once the customer is formally billed, this amount would be reclassified as accounts receivable.

Under the Percentage-Of-Completion Method, How Should Earned but Unbilled Revenues contract asset/liability\bold{\text{contract asset/liability}}contract asset/liability

Under the Percentage-Of-Completion Method, How Should Earned but Unbilled Revenues $\bold{\text{contract asset/liability}}$