A progress billing before retainage is $248,000 and the contract retains 10%. What retainage receivable is recorded?
Correct Answer
C) $24,800
Retainage receivable equals 10% of the billing, or $24,800.
Why This Is the Correct Answer
Retainage receivable equals 10% of the billing, or $24,800.
Why the Other Options Are Wrong
Option A: $12,400
$12,400 is below the supported result for retainage receivable; it likely uses the wrong base, period, or account bucket.
Option B: $18,600
$18,600 is below the supported result for retainage receivable; it likely uses the wrong base, period, or account bucket.
Option D: $223,200
$223,200 is above the supported result for retainage receivable; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Receivable and billing live in different drawers; Accountant Separating tells which opens.
Reference Hint
Open-book path: tab Builder's Guide to Accounting, 2001 to Section One, Cash and Charge Sales, Accounts Receivable; use the job ledger figures in the stem and recompute the same accounting measure.
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