Journal Entries Generated from Posted Transactions
This topic describes the general ledger journal entries created from cost transactions you post in Project and Job Costing. These entries appear on the G/L Transactions report.
It also describes general ledger journal entries created for job-related transactions by Accounts Receivable, Accounts Payable, and Inventory Control.
It also describes the transactions created during revenue recognition.
Material Usage (source code PM-MU)
When you run Day End in Inventory Control, that program calculates material costs based on the costing method used for the item in Inventory Control. Then it credits the inventory account assigned to the inventory item and the overhead allocated account and debits work-in-progress (or cost of sales, for projects that use the accrual-basis accounting method).
|
General Ledger Account |
Debit |
Credit |
|
WIP (or COS) |
X |
|
|
Inventory |
|
X |
|
Overhead Allocated |
|
X |
Material Returns (source code PM-MR)
When you run Day End in Inventory Control, that program debits the inventory account assigned to the inventory item and the overhead allocated account and credits work in progress (or cost of sales, for projects that use the accrual-basis accounting method) for materials returned to inventory.
|
General Ledger Account |
Debit |
Credit |
|
Inventory |
X |
|
|
Overhead Allocated |
X |
|
|
WIP (or COS) |
|
X |
Equipment Usage (source code PM-EQ)
When you post equipment charges to a project category, the program creates entries to debit work in progress (or cost of sales, for projects that use the accrual-basis accounting method) and credit overhead and the equipment contra-account you specify.
|
General Ledger Account |
Debit |
Credit |
|
WIP (or COS) |
X |
|
|
Equipment (contra-account) |
|
X |
|
Overhead Allocated |
|
X |
Timecards (source code PM-TC)
When you post timecards in Project and Job Costing, the program debits work in progress (or cost of sales, for projects that use the accrual-basis accounting method) and credits the wage expense and related labor and overhead accounts (if applicable).
|
General Ledger Account |
Debit |
Credit |
|
WIP (or COS) |
X |
|
|
Wage Expense |
|
X |
|
Labor (Burden) Allocated |
|
X |
|
Overhead Allocated |
|
X |
Charges (source code PM-CH)
The following entry is posted in Accounts Receivable when you post an invoice that includes a charge transaction.
|
General Ledger Account |
Debit |
Credit |
|
Receivables Control |
X |
|
|
Billings |
|
X |
Accounts Receivable
Posted invoices debit the general ledger receivables control account assigned to the customer and credit the billings account (or the revenue account, for projects that use the accrual-basis accounting method).
|
General Ledger Account |
Debit |
Credit |
|
Receivables Control |
X |
|
|
Billings |
|
X |
Accounts Payable
Posted invoices debit the work in progress account (or cost of sales, for projects that use the accrual-basis accounting method) and credit the payables control account.
|
General Ledger Account |
Debit |
Credit |
|
WIP (or COS) |
X |
|
|
Payables Control |
|
X |
Revenue Recognition (source code PM-RR)
The program generates general ledger entries to recognize revenue and gross profit, and to record the matching costs for the period (for percentage completion and billings and costs methods) or for the entire project (for the completed project method).
The journal entries, and their timing, vary according to the project type and accounting method. To review the journal entries for each project type and accounting method, click the following links:
-
Revenue recognition for cost plus projects
-
Revenue recognition for fixed price projects
-
Revenue Recognition for time and materials projects
If you use the option to clear billings and work in progress during revenue recognition, Project and Job Costing also creates general ledger entries to debit the billings account and credit work in progress for projects that use a percentage complete accounting method.
Note: If you reopen a project, you may have to reverse some or all of the revenue recognition entries, depending on the project's accounting method. To read more about reversing revenue entries, see the entry Reversing Revenue Recognition in the Reopening Projects topic.