A Auburndale job has a $1,840,000 contract, $552,000 cost to date, $828,000 estimated cost to complete, and $690,000 billed to date. What billing position should be shown?
Correct Answer
D) $46,000 underbilled
Compare billings to earned revenue under percent-complete accounting.
Why This Is the Correct Answer
Compare billings to earned revenue under percent-complete accounting.
Why the Other Options Are Wrong
Option A: $46,000 overbilled
$46,000 overbilled is not aligned with the supported result for over/under billing; it has the wrong label or classification even if the number looks close.
Option B: $736,000
$736,000 is above the supported result for over/under billing; it likely adds an unsupported amount or compares the wrong financial base.
Option C: $138,000
$138,000 is above the supported result for over/under billing; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Controller Reviews money test: bucket before math for over under billing.
Reference Hint
Open-book path: tab Builder's Guide to Accounting, 2001 to Section One, Accounting Methods, Percentage-of-Completion Method; Section Three, Recording Before the Event, Percentage of Completion Adjustments; use the job ledger figures in the stem and recompute the same accounting measure.
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