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17 June, 11:01

An entity has two long-term construction contracts, one of which qualifies for revenue recognition while the performance obligation is being met and the other which does not. For either of these two contracts, what account would be debited when preparing the journal entry to record billings?

a. qualifies does not qualify

b. cash billings

c. construction in progres construction in progress

d. construction receivable construction receivable

e. billings cash

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Answers (2)
  1. 17 June, 11:13
    0
    d. construction receivable construction receivable

    Explanation:

    Generally in accounting, accounts receivable refers to the balance of the amount of money owed by customers to an entity in respect goods delivered or services rendered. It is a component of the current asset in the balance sheet showing the balance of the amount of money for goods sold or service rendered on credit.

    In the question, either of these two contracts would be debited construction receivable when preparing the journal entry to record billings because they are long-term construction contracts which have not been paid for by the. contractee.
  2. 17 June, 14:42
    0
    Answer: construction receivable

    Explanation:

    Accounts receivable management involves improving the collection process for efficiency, identifying the reasons for nonpayment and being proactive in reminding clients about their overdue accounts.
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