- 1 Marks
Question
In accordance with International Accounting Standard (IAS) on construction contract, the process where the rate of progress billings for payment is higher than those utilized for revenue recognition is ……………………………..
Answer
Overbilling
Explanation:
Overbilling occurs when progress billings exceed the revenue recognized based on the completion of work. This results in deferred revenue that is recognized later. Therefore, the correct answer is “Overbilling.”
- Tags: Construction Contracts, IAS, Revenue Recognition
- Level: Level 1
- Topic: Regulatory Environment of Accounting
- Series: MAY 2012
- Uploader: Theophilus