1. Assurning a long-term construction project makes an overall profit, during the interim years, percentage of completion method accounting has impact on construction company's: Income Statement ONLY X Balance Sheet ONLY BOTH Income Statement and Balance Sheet None of the above 2. When a company write-off a bad debt under GAAP, it has impact on this company's: Income Statement ONLY Balance Sheet ONLY BOTH Income Statement and Balance Sheet Cash Flow Statement ONLY 3. For a construction company working on long-term contracts, construction in process (CIP) should be classified as what type of account on the Balance Sheet? X Long-term Asset Short-term Asset Owner's Equity Long-term Liability 4. Under the percentage-of-completion method, what journal entries (entry) increase(s) the balance of construction in process account? Recognition of construction costs ONLY Recognition of gross profit ONLY BOTH recognition of construction costs and recognition of gross profit To close completed project 5. When work to be done and costs to be incurred on a long-term contract can NOT be estimated dependably, which of the following methods of revenue recognition is preferable? Installment-sales method Percentage-of-completion method Completed-contract method None of the above 6. When a company estimates bad debt using allowance methods, it has impact on this company's: Income Statement ONLY Balance Sheet ONLY BOTH Income Statement and Balance Sheet Cash Flow Statement ONLY 7. Which of the following is a contra asset account when a company uses the percentage of completion method of accounting? Billings Construction in progress Revenue from long-term contracts Accounts receivable 8.For long-term contracts, when cumulative billings are in excess of construction in process (CIP), the excess billings represent what type of account on the Balance Sheet? Asset Liability Equity Revenue