unearned revenue

a 3-year project price 2500, cost 2000. use completed contract method of revenue recognition. year--------------1--------2---------3-------total billed-----------1000------1000------500-----2500 cash received-700-------1200-----600------2500 cost-------------700-------900------400-----2000 how much total unearned revenue should be recorded at end of year2? a. 2000 b.1900 schweser answer is billed total amount 2000. I think it is cash received total amount 1900

edit: oops, yeah 2000 accrual accounting - payment is reasonably assured

I think it would be “earned” revenue since you have already technically earned it, but you still won’t recognize any of it anyway until you have completed the contract.

They billed, they received some cash. They record unearned revenue in the amount billed, not in the amount received. Unearned revenue liability is credited, probably inventory - undergoing construction is debited.