COST IN EXCESS OF BILLINGS, in percentage of completion method, is when the billings on uncompleted contracts are less than the income earned to date. These under-billings result in increased assets. Conversely, where billings are greater than the income earned on uncompleted contracts, a liability, billings in excess of costs, results.
ACCOUNTING PRINCIPLES see GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
DETECTION RISK is the risk that audit procedures will lead to a conclusion that material error does not exist when in fact such error does exist.
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