Earned revenue is $100,000, but billings to date are $120,000. What is the billing position?
Correct Answer
C) $20,000 overbilled.
Billings exceed earned revenue by $20,000, so the job is overbilled by $20,000.
Why This Is the Correct Answer
Billings exceed earned revenue by $20,000, so the job is overbilled by $20,000.
Why the Other Options Are Wrong
Option A: $20,000 underbilled.
$20,000 underbilled. is not aligned with the supported result for overbilling calculation; it has the wrong label or classification even if the number looks close.
Option B: $120,000 earned.
$120,000 earned. is above the supported result for overbilling calculation; it likely adds an unsupported amount or compares the wrong financial base.
Option D: $100,000 unearned cost.
$100,000 unearned cost. is above the supported result for overbilling calculation; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Reviewing Contractor'S yardstick: earned work measures whether billing sits high or low.
Reference Hint
Study anchor (closed-book): memorize Overbilling calculation from CSLB Law and Business Study Guide; CSLB 2026 Law Book / CSLB Law and Business Study Guide Business Finances; know the rule or calculation trigger without relying on exam-room lookup.
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