Hi,
I am trying to design closing process for Installations Job, during the progress all the costs are booked in Cost in Progress Account(Balance Sheet Account) and Billing is booked in Billing in Progress Account,
I want to do revenue recognition only at the completion of the Job by relieving Cost and Billing in progress to P&L, the question is about delayed sales cost, there are cost which we incur after the job is completed such as vouchers from subcontractor etc, I am using the following procedure to close the job please let me know if its is correct
Example
CIP Actuals - 10000
BCIP - 15000
Expected delayed sales cost - 2000
Entries
Dealyed Sales Cost Entry- this will be a reversing entry which will be reversed the next month
Credit Delayes Sales Cost Accrual -2000
Debit Delayed Sales Cost CIP +2000
Revenue Recognition Entries
Debit Contract BCIP +15000
Credit Contra CIP -12000
Credit Sales -15000
Debit COGS +12000
The Job is kept on hold for two months for all the delayed sales cost to actually incure lets take the case that we incurred only 1800
As we will have the Delayed Sales cost entry reversed now the current entry would be like this
Credit COGS -200
Debit Contra CIP +200
Please let me know of this is the co
I am trying to design closing process for Installations Job, during the progress all the costs are booked in Cost in Progress Account(Balance Sheet Account) and Billing is booked in Billing in Progress Account,
I want to do revenue recognition only at the completion of the Job by relieving Cost and Billing in progress to P&L, the question is about delayed sales cost, there are cost which we incur after the job is completed such as vouchers from subcontractor etc, I am using the following procedure to close the job please let me know if its is correct
Example
CIP Actuals - 10000
BCIP - 15000
Expected delayed sales cost - 2000
Entries
Dealyed Sales Cost Entry- this will be a reversing entry which will be reversed the next month
Credit Delayes Sales Cost Accrual -2000
Debit Delayed Sales Cost CIP +2000
Revenue Recognition Entries
Debit Contract BCIP +15000
Credit Contra CIP -12000
Credit Sales -15000
Debit COGS +12000
The Job is kept on hold for two months for all the delayed sales cost to actually incure lets take the case that we incurred only 1800
As we will have the Delayed Sales cost entry reversed now the current entry would be like this
Credit COGS -200
Debit Contra CIP +200
Please let me know of this is the co