Construction accounts

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 August 2013 can somebody tell me what journal entries to be passed when construction of building contract is received from the contractee?

Querist : Anonymous

Querist : Anonymous (Querist)

25 August 2013 hi,there folk,
there are two methods of passing journal entries in the construction business.
1. percentage of completion method
2. completed contract method.

the journal entries for percentage contract method.
wip.
contract cost a/c dr
to contract exp a/c
2.when company bills the customer
accounts receivable a/c dr
to progress billing a/c
3.when cash rec from customer
cash/bank a/c dr
to account receivable a/c
4.completion of project
progress billing a/c dr
to construction revenue a/c.