Let’s say my customer signs a contract for 100k and I deposit the 100k (usually in increments). The project should cost 80k and my profit earnings 20k. After invoicing all costs for the project the credit balance is 20k.
(A) should the project be marked complete with a credit balance and I perform a journal entry?
(B) should I issue an invoice to a line item my accountant can recognize as profit and zero out the project?
(C) or-what is the correct procedure to record profit earnings while having a zero balance in the project and not messing up the project profit reports?
help…. Thanks!
