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Accounting entries for work order

A/c entries 1358 views 2 replies

JAIKUMAR SINGH

DEALER

27 Points Posted on 15 March 2012

My Friend is working in a Private Limited company. which is ingaed in work orders for CGWA Aprovals.

Payment Schedule is as below

1. 40% advance with work order

2. 40% on Submission of Reports

3. balance at Completion

So when Revenus should be Recognised in Accounts. Because every Work order takes aprox 5 to 6 Months for Completion

Suggest Journal Entries also

Replies (2)

Nitil Kr. Agarwala

Persuing CS

264 Points Posted on 15 March 2012

Sir,

Revenue shall be entered into the books once the project is totally completed. As per payment received, the should be treated as advance from party on account.

Thanks

Ateeq

CA - Final

218 Points Posted on 20 March 2012

Originally posted by : Nitil Kr. Agarwala
	Sir, Revenue shall be entered into the books once the project is totally completed. As per payment received, the should be treated as advance from party on account. Thanks

Agreed but incase if the transaction starts in one financial year and gets completed in another or next financial year then you should recognize the same as AS-7 (Construction Contracts).