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Capital work in progress

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Querist : Anonymous

Querist : Anonymous (Querist)

19 April 2013 when we make payment for say construction of any workshop then the journal entry we pass

party dr
to bank

then we transfer to capital work in progress

capital work in progress dr
to party

until we pass the 2nd journal entry we show the amount as capital advances.
my question is when shall we pass the 2nd journal entry.
is there any criteria upon which amount to be transferred to capital work in progress is determined.

Please someone revert back .
It's urgent.

Hemant Kumar

Hemant Kumar (Expert)

19 April 2013 1) You can pass the 2nd entry after the receiving M.B. (Measurement bill).

2) You have to capitalized whole amount (i.e billed amount) either advance amount deducted from the bill or not.

Querist : Anonymous

Querist : Anonymous (Querist)

21 April 2013 what is measurement bill

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