This document outlines the accounting treatment for various stages of a construction contract. The tender price and deposit are not recorded in the contract account. The contract price is credited to the contract account when the contract is complete. Work completed is not shown in the contract account, which is based on the contract price. Work certified is debited to the work in progress account and credited to the contract account for work completed and certified by the architect. Uncertified work is shown in the work in progress account. The document also provides instructions for transferring notional profit to the profit and loss account based on the percentage of work certified.
This document outlines the accounting treatment for various stages of a construction contract. The tender price and deposit are not recorded in the contract account. The contract price is credited to the contract account when the contract is complete. Work completed is not shown in the contract account, which is based on the contract price. Work certified is debited to the work in progress account and credited to the contract account for work completed and certified by the architect. Uncertified work is shown in the work in progress account. The document also provides instructions for transferring notional profit to the profit and loss account based on the percentage of work certified.
This document outlines the accounting treatment for various stages of a construction contract. The tender price and deposit are not recorded in the contract account. The contract price is credited to the contract account when the contract is complete. Work completed is not shown in the contract account, which is based on the contract price. Work certified is debited to the work in progress account and credited to the contract account for work completed and certified by the architect. Uncertified work is shown in the work in progress account. The document also provides instructions for transferring notional profit to the profit and loss account based on the percentage of work certified.
[3] Tender Price & Deposit: Will not be shown in Contract A/c.
[4] Contract Price : Will be credited to contract a/c.,when Contract
is completed. [5] Work completed : Will not be shown (Calculate on the basis of Contract price) in Contract Account. [6] Work Certified : Will debited to WIP a/c and Credited to Contract a/c. [work completed and also certified by the architect] [7] Work uncertified : Will be shown under WIP Account. [Work completed but not certified] NOTE:- If work certified is given ranging from 75% to 100%,then 2/3rd of Notional Profit should be transferred to Profit and Loss A/c and balance must be in Capital Reserve or Work-In-Progress,else if it ranges from 50% to 75%,1/3 rd should be transferred. Notional Profit X 2/3 X Cash Recived/Work Certified PROCESS ACCOUNTING FOR THE BOOKS OF.. PROCESS ACCOUNTS/COSTING