[Parthamis]

okay so I understand the concept of percentage of completion.. you recognize revenue as the work is completed based on costs incurred and total expected costs.

When doing a JE for the Sim, I am confused about the Construction in Progress entry. is it essentially a plug figure?

[Anonymous]

The CIP Account also gets the percentage of gross profit that is recognized for a particular year. Assuming no contract losses.

Journal Entry

CIP (gross profit) XX
Costs of Construction XX
Revenue from Long term Construction Contracts XX

Hope that helps

[Author]

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