Question:
Periodic billings to the customer for a long-term construction contract are recorded as billings on
construction contract. How is this account reported in the balance sheet?
Answer:
The billings on construction contract account is a contra account to the construction in progress asset. At
the end of each reporting period, the balances in these two accounts are compared. If the net amount is a
debit, it is reported in the balance sheet as an asset. Conversely, if the net amount is a credit, it is reported
as a liability.
Periodic billings to the customer for a long-term construction contract are recorded as billings on
construction contract. How is this account reported in the balance sheet?
Answer:
The billings on construction contract account is a contra account to the construction in progress asset. At
the end of each reporting period, the balances in these two accounts are compared. If the net amount is a
debit, it is reported in the balance sheet as an asset. Conversely, if the net amount is a credit, it is reported
as a liability.
