29.
Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted.
When construction-in-progress exceeds billings, is a company with a continuing flow of profitable long-term contracts most likely to have lower total assets and lower total liabilities, respectively, if the company uses the completed contract method or the percentage-of-completion method?
| Lower total assets | Lower total liabilities | A. | Completed contract method | Completed contract method | B | Completed contract method | Percentage-of-completion method | C | Percentage-of-completion method | Completed contract method | D | Percentage-of-completion method | Percentage-of-completion method |
Select exactly 1 answers from the following:
A. B. C. D.
答案和详解如下！
Feedback: Correct answer: B
The Analysis and Use of Financial Statements, 3rd edition, Gerald I. White, Ashwinpaul C. Sondhi, and Dov Fried (Wiley, 2003), pp. 40?4 2006 Modular Level I, Vol. II, pp. 520-524 Study Session 7-31-c identify the appropriate income statement and balance sheet entries using the percentage-of-completion method and the completed contract method and describe and calculate the effects on cash flows and selected financial ratios that result from using the percentage-of-completion method versus the completed contract method
If construction-in-progress exceeds billings, a company with a continuing flow of profitable long-term contracts using the percentage-of-completion method will have higher total assets, lower total liabilities, and higher equity compared to using the completed contract method.
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发表于 2006-11-21 11:54
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