Choose the Correct Statement Concerning the Percentage-Of-Completion Method of Accounting

Choose the correct statement concerning the percentage-of-completion method of accounting for a firm with only one current long-term construction contract in process (assume no loss is projected) :

A) The net current asset account (net of construction- in- process, and billings) exceeds that same account under the completed contract method.
B) If the construction- in- process account exceeds the billings account, total costs to date must exceed total billings to date.
C) If the construction- in- process account exceeds the billings account, total costs to date must exceed total cash received on the contract to date.
D) It is possible to have both a net current asset account and a net current liability account in this situation.

Correct Answer:

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