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Construction Flashcards

1
Q

Percentage-of-Completion Method:Recognize revenue as the project progresses

A

Dr. Construction in Progress (CIP)
Cr. Construction Revenue

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2
Q

Completed-Contract Method:Recognize revenue upon project completion

A

Dr. Accounts Receivable
Cr. Construction Revenue

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3
Q

Record costs as incurred

A

Dr. Construction in Progress (CIP)
Cr. Cash (or Accounts Payable)

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4
Q

When billing the customer:

A

Dr. Accounts Receivable
Cr. Billings on Construction in Progress (BCIP)

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5
Q

Advance Payment: Upon receipt:

A

Dr. Cash
Cr. Billings in Excess of Costs and Estimated Earnings

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6
Q

When a loss is anticipated:

A

Dr. Loss on Construction Contract
Cr. Provision for Loss on Construction Contract

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7
Q

When retainage is withheld:

A

Dr. Retainage Receivable
Cr. Accounts Receivable

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8
Q

At project completion:

A

Dr. Billings on Construction in Progress (BCIP)
Cr. Construction in Progress (CIP)
Cr. Construction Revenue (if applicable)

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9
Q

For overbilling:

A

Dr. Billings on Construction in Progress (BCIP)
Cr. Billings in Excess of Costs and Estimated Earnings

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10
Q

For underbilling:

A

Dr. Costs and Estimated Earnings in Excess of Billings
Cr. Construction in Progress (CIP)

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11
Q

Recording costs incurred on a construction project

A

Dr. Construction in Progress (CIP)
Cr. Cash (or Accounts Payable)

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12
Q

Billing customer for progress on construction contract

A

Dr. Accounts Receivable
Cr. Billings on Construction in Progress (BCIP)

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13
Q

Recognizing revenue under percentage-of-completion method

A

Dr. Construction in Progress (CIP)
Cr. Construction Revenue

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14
Q

Recording profit on construction contract (percentage-of-completion)

A

Dr. Construction in Progress (CIP)
Cr. Construction Revenue

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15
Q

Receiving advance payment from customer

A

Dr. Cash
Cr. Billings in Excess of Costs and Estimated Earnings

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16
Q

Recognizing loss on unprofitable construction contract

A

Dr. Loss on Construction Contract
Cr. Provision for Loss on Construction Contract

17
Q

Completion of construction project

A

Dr. Billings on Construction in Progress (BCIP)
Cr. Construction in Progress (CIP)
Cr. Construction Revenue (if applicable)

18
Q

Recording retainage withheld by customer

A

Dr. Retainage Receivable
Cr. Accounts Receivable

19
Q

Capitalizing interest on self-constructed asset

A

Dr. Construction in Progress (CIP)
Cr. Interest Expense

20
Q

Adjusting overbilling situation at year-end

A

Dr. Billings on Construction in Progress (BCIP)
Cr. Billings in Excess of Costs and Estimated Earnings

Basic SW (14 decks)

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