Contract Costing is a difficult one for accounting.
Basics of which, can be seen in this PPT. I hope it will help to understand what is Contract Costing and how its accounting can be done. Please Like if it proves to be helpful for you.
This is one of the hardest topic in Accounting. To make it easier I have prepared this one. It is according to AS 7. These are some of the basics of Contract Accounting. How to account Contact?
Like if it proves to be useful for you.
This power point presentation related to process costing. which is useful to students who studying B.com, BBA,M.COM MBA etc.
It involves short notes on definition of process costing,its features,applications,difference between process costing and job costing, advantages and disadvantageous of process costing, procedure of process costing,format of process account, process losses and abnormal gain.
This is one of the hardest topic in Accounting. To make it easier I have prepared this one. It is according to AS 7. These are some of the basics of Contract Accounting. How to account Contact?
Like if it proves to be useful for you.
This power point presentation related to process costing. which is useful to students who studying B.com, BBA,M.COM MBA etc.
It involves short notes on definition of process costing,its features,applications,difference between process costing and job costing, advantages and disadvantageous of process costing, procedure of process costing,format of process account, process losses and abnormal gain.
The objective of the ppt of Elements of Costs and classification of expenditure is to have precise information, especially for the non commerce management students. I believe this would help them to understand the subject easily.
01.Understand the concept of ‘Overheads’.
02.Understand classification, allocation, apportionment and absorption of overheads.
03. Understand the Primary and Secondary Distribution of Overheads.
04. Understand the Traditional & Activity Based Costing methods
05. Identify the value added & non value added activity
Activity based costing is considered to be useful only for Manufacturing Organizations whereas reality is that it is equally usefull to Service providers
A power point presentation describing some basic definitions, father of cost accounting, Indian aspect of cost accounting and Various Methods and Techniques of costing.
Presented by: Aquib Ali, Ajay Gupta and Ashwin Showi. (M.Com students)
at the Bhopal School of Social Sciences(BSSS) on 6 September, 2017
Marginal costing is a costing technique wherein the marginal cost, i.e. variable cost is charged to units of cost, while the fixed cost for the period is completely written off against the contribution.
1.1 identify the type of accounting
1.2 difference between Cost Accounting , Cost Accountancy and Costing
1.3 understand the Management information needs
1.4 identify the objectives of cost accounting
1.5 difference between Cost Accounting Vs. Financial Accounting
1.6 identify the role of cost accountant
The objective of the ppt of Elements of Costs and classification of expenditure is to have precise information, especially for the non commerce management students. I believe this would help them to understand the subject easily.
01.Understand the concept of ‘Overheads’.
02.Understand classification, allocation, apportionment and absorption of overheads.
03. Understand the Primary and Secondary Distribution of Overheads.
04. Understand the Traditional & Activity Based Costing methods
05. Identify the value added & non value added activity
Activity based costing is considered to be useful only for Manufacturing Organizations whereas reality is that it is equally usefull to Service providers
A power point presentation describing some basic definitions, father of cost accounting, Indian aspect of cost accounting and Various Methods and Techniques of costing.
Presented by: Aquib Ali, Ajay Gupta and Ashwin Showi. (M.Com students)
at the Bhopal School of Social Sciences(BSSS) on 6 September, 2017
Marginal costing is a costing technique wherein the marginal cost, i.e. variable cost is charged to units of cost, while the fixed cost for the period is completely written off against the contribution.
1.1 identify the type of accounting
1.2 difference between Cost Accounting , Cost Accountancy and Costing
1.3 understand the Management information needs
1.4 identify the objectives of cost accounting
1.5 difference between Cost Accounting Vs. Financial Accounting
1.6 identify the role of cost accountant
Resentation for PeopleSoft SCM users group comparing and Standard and Actual Costing for Production Inventories using PeopleSoft Cost Managment functionality.
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An EFL lesson about the current events in Palestine. It is intended to be for intermediate students who wish to increase their listening skills through a short lesson in power point.
The French Revolution, which began in 1789, was a period of radical social and political upheaval in France. It marked the decline of absolute monarchies, the rise of secular and democratic republics, and the eventual rise of Napoleon Bonaparte. This revolutionary period is crucial in understanding the transition from feudalism to modernity in Europe.
For more information, visit-www.vavaclasses.com
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The Roman Empire, a vast and enduring power, stands as one of history's most remarkable civilizations, leaving an indelible imprint on the world. It emerged from the Roman Republic, transitioning into an imperial powerhouse under the leadership of Augustus Caesar in 27 BCE. This transformation marked the beginning of an era defined by unprecedented territorial expansion, architectural marvels, and profound cultural influence.
The empire's roots lie in the city of Rome, founded, according to legend, by Romulus in 753 BCE. Over centuries, Rome evolved from a small settlement to a formidable republic, characterized by a complex political system with elected officials and checks on power. However, internal strife, class conflicts, and military ambitions paved the way for the end of the Republic. Julius Caesar’s dictatorship and subsequent assassination in 44 BCE created a power vacuum, leading to a civil war. Octavian, later Augustus, emerged victorious, heralding the Roman Empire’s birth.
Under Augustus, the empire experienced the Pax Romana, a 200-year period of relative peace and stability. Augustus reformed the military, established efficient administrative systems, and initiated grand construction projects. The empire's borders expanded, encompassing territories from Britain to Egypt and from Spain to the Euphrates. Roman legions, renowned for their discipline and engineering prowess, secured and maintained these vast territories, building roads, fortifications, and cities that facilitated control and integration.
The Roman Empire’s society was hierarchical, with a rigid class system. At the top were the patricians, wealthy elites who held significant political power. Below them were the plebeians, free citizens with limited political influence, and the vast numbers of slaves who formed the backbone of the economy. The family unit was central, governed by the paterfamilias, the male head who held absolute authority.
Culturally, the Romans were eclectic, absorbing and adapting elements from the civilizations they encountered, particularly the Greeks. Roman art, literature, and philosophy reflected this synthesis, creating a rich cultural tapestry. Latin, the Roman language, became the lingua franca of the Western world, influencing numerous modern languages.
Roman architecture and engineering achievements were monumental. They perfected the arch, vault, and dome, constructing enduring structures like the Colosseum, Pantheon, and aqueducts. These engineering marvels not only showcased Roman ingenuity but also served practical purposes, from public entertainment to water supply.
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2. COSTING
“The technique and
process of
ascertaining costs.”
Contract
Costing
Batch
Costing
Single
Costing
Process
Costing
Job Costing
Operating
Costing
Multiple
Costing
4. Each contract is treated as a cost unit.
A separate account for each contract.
Work is done at site, away from contractor’s own
premises.
The contract has a long duration usually extending more
than one accounting year.
All items of cost which are directly related to the contract
are chargeable to respective contract accounts.
Payment is made by contractee on the basis of work
certified by surveyor or architect.
Penalties or extra money may be imposed.
Though contract costing is a part of Cost Accounting, but
it is purely based on the principles of Financial
Accounting. Such as Dual Aspect, Prudence and
Conservatism. And AS9 (Revenue Recognition)
5. • Fixed Price is agreed
• Deductions are made for Defectives and Penalties
• Extra money for additional work
Fixed Price Contract
• compensates for costs actually incurred by contractor.
• a percentage of cost or any lump sum amount.
Cost Plus Contract
• Mixture of both of the above.
• A fixed price will increase with increase in cost of material,
labour.
Contract with Escalation Cost
6. Land Cost
Site labour Cost
Cost of material
Depreciation on plant and equipments used at site
Sub Contract Cost
Cost of moving plant
Cost of hiring Plant & Machinery
Cost of design
Maintenance Cost
Guarantee & Warrantee Cost
Penalties, etc.
7. × General Administrative Cost
× Selling Cost
× Research & Development Cost
× Depreciation on ideal plant & equipment
× Cost of unconsumed material
× Advance payment to sub contractor
× Cost of material which is delivered to site for
future
× Profit/Loss on sale of any material/plant
8. Can you Say how
much work
has been
completed ???
Can you Say how
much work
has been
completed ???
New Building of
Central Bank,
Europe
9. “Work Certified is that
proportion of the work
completed which has
been certified or and
valued by the architect
or surveyor.”
Payment is made on the
basis of Work Certified.
“Work Uncertified is
that part of the work
completed which has not
been certified/approved
by the contractee’s
architect or surveyor.”
There is no role of Work
Uncertified in payment.
Accounting Treatment is same for both:
Work-in-Progress A/c Dr.
To Contract A/c
10. 01/04/2015 – 31/03/2016
(ONE FINANCIAL YEAR)
01/04/2015
1.Starting of year
2. Starting
/continuation
of contract
31/10/2015
Assessment done
by Architect or
Surveyor and
certified the
work done, i.e.
work certified
31/03/2015
1.Ending of year
2. Date of
payment
3. Closing of
account of
incomplete
contract
Work Done and certified
Work Done but not
certified
WORK
CERTIFIED
WORK
UNCERTIFIED
11. A Contractor does not receive full payment of the
Work Certified by the surveyor.
Contractee retains some amount to be paid, after
sometime, when it is ensured that there is no fault in
the work carried out by contractor.
This retained money is called as Retention Money.
Retention Money= Value of work Certified
(-) Payment actually made
12. Particulars Amount Particulars Amount
To Material Purchased XXX By Work-in-progress:
Work Certified
Work Uncertified
XXX
XXX
To Material received from
stores XXX
By Material Return to
Stores XXX
To Material from other
contract XXX
By Material sent to other
contract XXX
To Wages XXX By COST of Material Sold XXX
To Indirect Expenses XXX By Material on Hand XXX
To Plant & Machinery XXX By Plant on Hand XXX
To Accrued Wages XXX
To Accrued Expenses XXX
To Notional Profit c/d XXX
XXX XXX
13. If Profit,
Transferred to Credit
side of P&LAccount
If Loss,
Transferred to Debit
side of P&LAccount
If Profit,
1 Part Transferred to
Credit side of P&L
Account as per the
work Completed
Another to WIPA/c
If Loss,
Transferred to Debit
side of P&LAccount
14. As per the % of Work Completion, 3 stages of work completed
is made which helps in transferring the amount to P&L Account.
Stage Name
% of Work
Completion
Formulae
Initial Stage 0% to 24% No Profit will be transferred to P&L
Work done but
not Substantial
25% to 49%
Substantial
Work Done
50% to 100%
15. LIABILITIES Amount ASSETS Amount
Work in Progress:
XXX
Work Certified XXX
Costing P&L Account
XXX
(+)Work
Uncertified XXX
Contractee A/c XXX (-) Cash Received (XXX)
Unpaid Expenses XXX (-) WIP Reserve (XXX)
Unpaid Wages
XXX
Plant in Hand
(Less Depreciation) XXX
Material on Hand XXX
Cash XXX