In this article we will discuss about the procedure for recording of costs, value and profit on contracts. Recording of Costs of a Contract: The following is the recording procedure for different costs relating to a contract: 1. Materials: Contract Account is debited with the following, relating to materials: (a) Materials specially purchased and sent to contract site. (b) Materials [...]
In this article we will discuss about the calculation of profit or loss on contracts. (a) Completed Contracts: When a contract is completed, the overall profit or loss on the contract is transferred to the profit & Loss Account fully. (b) Incomplete Contracts: When there is loss on an incomplete contract, it is fully transferred to the profit and loss [...]
In this article we will discuss about:- 1. Meaning and Definition of Contract Costing 2. Features of Contract Costing 3. Procedure 4. Computation of Profit or Loss 5. Cost Plus Method 6. Important Matters to be taken into Considerations. Contents: Meaning and Definition of Contract Costing Features of Contract Costing Contract Costing Procedure Computation of Profit or Loss on Contract [...]