A company uses the percentage-of-completion method to account for a 4-year construction contract. Which of the following should be used in the calculation of the income recognized in the first year?

Select one:

a. Progress Billings, but not Collections on Progress Billings

b. Collections on Progress Billings, but not Progress Billings

c. Both Progress Billings and Collections on Progress Billings

d. Neither Progress Billings nor Collections on Progress Billings