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accounting error in PS billing

Former Member
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in PS billing result analysis.

for example contract revnue: 2000, in January actual cost:100, plan cost 1000, then calculated January revenue is 200. Jan billed revenue is 300

in cost based poc method, result analysis accounting entry in January should be based on 200 or 300?

(1)

Dr: AR  200                             (2)   Dr: AR 300

Cr: defrered Revenue  200     or         Cr: defered revnue 300

(1) is correct or (2) is correct?

if Feb calculated revnue is 500, billed revenue is 300

in March, we do final billing calculated revenue is 1300, billed revenue is 1400.

is below entry correct?

Dr: defered revenue  2000

Cr: revenue 2000

but the delivery happen in Jan, so: Dr: cogs  1000   Cr: inventory 1000

why cogs recognized in Jan and revenue recognized in March, does it violat accounting matching principle?

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Answers (1)

Former Member
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Like i said in your earlier thread, talk to your FICO guys to understand this in a better way. Direct answers posted here wont help you in understanding the actual process.

Its for your benefit that i am asking you to consult your FICO guys.