jamespucyk
New member
- Feb 7, 2006
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Hey, for determining the amount you add to the Construction in Progress account or Advanced Bilings account you determine what the total Construction in Progress asset is and what the Advanced Billing Liability is and then you net them. In determining this the text states CIP = Costs + Profit and Advanced Billings = Cash Collected, however isn't CIP analogous to Revenue, so why do they use it in this mannor? All the questions I've worked with have been without tax, so with tax is the proper method to use is the Cost + Proft convention?
I'm just asking cus I just look at revenue and cash collected and net it for the life of the contract and I've never had a poblem in the dozen questions I've done using that method? Is ther other way better?
Edited 2 time(s). Last edit at Monday, April 17, 2006 at 10:36AM by jamespucyk.
I'm just asking cus I just look at revenue and cash collected and net it for the life of the contract and I've never had a poblem in the dozen questions I've done using that method? Is ther other way better?
Edited 2 time(s). Last edit at Monday, April 17, 2006 at 10:36AM by jamespucyk.