Q&A: Would the signing of a contract be recorded in a construction company’s accounting journal?
Question by redmercury82: Would the signing of a contract be recorded in a construction company’s accounting journal?
Working on some accounting homework; I’m not sure how to journalize the signing of a contract for an imaginary construction company. Any accounting majors out there who can tell me whether the signing of a $ 250,000 contract for work set to begin at a future date would be recorded in the general journal? If yes, which accounts are debited and credited? Thanks a bunch.
Best answer:
Answer by dotted.nose
you only need to make a memo entry, not a journal entry. take it up in your general journal. there’s no basis for recording a receivable nor income since there has been no substantial performance of services or delivery of goods yet.
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