Accounting

Accountancy

When a fee payment is made on behalf of clients in a contract,It means that all fees and expenses are included in the contract. what will be the accounting effect? Let's say A given a contract to B for Rs. 50,000, and B made a fee payment of Rs. 15,000. What will be the accounting entry in the books of B for the Rs. 50,000 payment made by A and fees and expenses occured in this contract?

Jiya T

CA Inter

★ 10

20-Jun-23 11:51

523

Answers (2)

It depends if its cost plus contract, such case 65,000 will be the income and 15,000 will be the cost Entry will be: A a/c dr: 65000 Contract a/c: 65000 Contract a/c Dr: 15000 Fees a/c: 15000

Sanath Kumar S

CA Final

★ 3K+

20-Jun-23 21:49

Sanath Kumar S

It depends if its cost plus contract, such case 65,000 will be the income and 15,000 will be the cost Entry will be: A a/c dr: 65000 Contract a/c: 65000 Contract a/c Dr: 15000 Fees a/c: 15000

if costs are contract included: A a/c dr: 50000 Contract a/c: 50000 Contract a/c dr: 15000 Fees a/c: 15000

Sanath Kumar S

CA Final

★ 3K+

20-Jun-23 21:52