Posting Accounts Used for a Project Fee on Cost Plus or Fixed Price Projects

Issue

What accounts are posted to when I use a Retention fee on a Cost Plus or Fixed Price project?

Resolution

Upon Billing the Project fee:
Debit - Accounts Receivable
Credit - Project Billing

Upon doing Revenue Recognition:
Debit - Project Work in Progress
Credit - Project Revenue

Note - The Earnings in Excess of Billings account could be used if the Revenue Recognition process is done before or in a higher dollar value than the Billings. If this is done, Earning in Excess of Billings will be debited during Revenue Recognition and then credited to be brought back down to a $0 balance during the final Revenue Recognition.

This article was TechKnowledge Document ID: 30792