Construction Accounting – Lecture Review

These flashcards cover key journal entries, account functions, costing concepts, and special rules discussed in the construction-accounting lecture.

When accruing social insurance, health insurance and trade-union fees for direct production workers, which accounts are used?

Debit TK 622 – Credit TK 338.

The construction industry is considered to have what production nature?

Industrial in nature (tính chất công nghiệp).

Recording wages (234 million VND) for construction-machine operators when the enterprise does NOT keep separate machine accounts:

Debit TK 623 – Credit TK 334 (234,000,000 đ).

Entry for issuing cement worth 57 million VND to a construction site:

Debit TK 621 – Credit TK 152 (57,000,000 đ).

Main cost components in a construction enterprise’s production costs?

Direct materials, direct labour, construction-machine costs, and manufacturing overhead (SXC).

What does account TK 623 “Chi phí sử dụng máy thi công” record?

It gathers and allocates costs of operating construction machinery serving the site directly.

End-period transfer of construction-machine costs (no separate accounting kept):

Debit TK 154 – Credit TK 623.

Entry for wages payable to direct construction workers (156.5 million VND):

Debit TK 622 – Credit TK 334 (156,500,000 đ).

Which items belong to ‘construction-machine operating costs’?

All related costs: wages & allowances of machine crews, fuel & materials, depreciation, repairs, rentals, subcontract fees, utilities, etc.

Because construction products are fixed to a location, what organisational implication follows?

Work must be done at a chosen geographic site and workers move continuously to that site.

General principle for organising accounting in a business?

It must comply with accounting standards, State regulations, fit the firm’s characteristics and staff competence (all given statements are correct).

Requirement for filling in an accounting voucher?

All mandatory elements must be written accurately; supplementary elements are optional.

Accruing insurance & union fees for construction workers (on-site labour):

Debit TK 622 – Credit TK 338.

Current organisation form of construction production in Việt Nam?

By taking construction contracts (phương thức nhận thầu).

Issuing multi-period tools (CCDC) to construction machines (no separate machine accounting): initial and allocation entry?

Initial: Debit TK 242 – Credit TK 153; Allocation: Debit TK 623 – Credit TK 242.

Buying multi-period tools for construction machines (no separate machine accounting):

Initial: Debit TK 242, 133 – Credit appropriate payables; then Debit TK 623 – Credit TK 242 when allocating.

Given WIP opening 3,240,000 and current costs 1,000,000 (thousand VND), what is WIP at period end (project unfinished)?

4,240,000 (= 3,240,000 + 1,000,000).

Recording wages increases direct-labour cost and which liability?

Increases payable to employees (TK 334).

Other payments are recognised as contract revenue only when …

They are approved by the customer and can be measured reliably.

Account TK 632 reflects what?

Cost of goods sold (giá vốn) for products / services already delivered in the period.

Actual warranty costs are normally offset against which provision account?

Debit TK 352 (Provision) and VAT input if any; credit materials, payables, etc.

Allocate 110 000 G&A cost between Project A (revenue 2 000 000) and Project B (revenue 6 000 000):

Project A: 27 500 ; Project B: 82 500.

Cash collected from customer according to progress billings is recorded how?

Debit TK 111/112/131 – Credit TK 337 (and TK 3331 for VAT).

Revenue for 26 % completion on a 3,500,000 contract (excluding 10 % VAT):

910,000 (3,500,000 × 26 %).

Excess abnormal self-constructed asset cost (34.5 million) is treated how?

Debit TK 642 – Credit TK 154 (34,500,000 đ).

In the simple cost formula Z = Dđk + C(n) – Dck, what does C(n) include in construction?

Direct materials, direct labour, machine costs and manufacturing overhead.

Recording financial expense or loss (e.g., investment loss):

Debit TK 635 – Credit Cash / securities / investments (111,112,121,128,221).

Normal structure of TK 352 ‘Provisions’:

Increases on the Credit side, decreases on the Debit side, ending credit balance possible.

Debit side balance of TK 337 shows what?

Revenue recognised exceeds amounts billable/received – an amount receivable from the client.

Issuing a five-period tool worth 25 million to construction machines (no separate machine accounting):

Initial: Debit TK 242 – Credit TK 153 (25 m); first allocation: Debit TK 623 – Credit TK 242 (5 m).

Accruing insurance & union fees 65 million for direct labour on site:

Debit TK 622 – Credit TK 338 (65,000,000 đ).

Transferring cost of goods sold (1,234,650,000 đ) to determine profit:

Debit TK 911 – Credit TK 632 (1,234,650,000 đ).

Closing G&A expenses (345,677,500 đ) to TK 911:

Debit TK 911 – Credit TK 642 (345,677,500 đ).

Financial revenue normally includes which items?

Interest income, foreign-exchange gains, and other financial income.

Account TK 641 ‘Selling expenses’ normally has what balance structure?

Increases on Debit, decreases on Credit, no ending balance.

Profit before tax for Project B (revenue 6 000 000; cost 5 500 000; allocated G&A 112 500):

387 500.

Depreciation allocated to construction machines when machine costs are accounted separately (56 million):

Debit TK 623 – Credit TK 214 (56,000,000 đ).

Income from disposal of construction equipment already fully depreciated is recorded:

Debit Cash (111/112/131) – Credit TK 711 (Other income) and TK 3331 for VAT, if any.

A performance bonus is recognised as contract revenue only when …

Achievement of stated targets is certain AND the bonus amount can be measured reliably.

Credit balance of TK 337 indicates what?

Progress billings exceed revenue recognised – an amount owed back to the customer until work completed.

Salary & contributions for directors and office staff are recorded:

Debit TK 642 – Credit TK 334, 338.

Cash interest received (12.5 million) is recorded:

Debit Cash (111) – Credit TK 515 (Financial revenue) 12,500,000 đ.

Materials issued to construction-site administration (204 million):

Debit TK 627 – Credit TK 152 (204,000,000 đ).

Given opening WIP 500 000 and current costs 1 900 000, what is ending WIP (project unfinished)?

2 400 000 (answer choices did not list this value).

Allocating prepaid expense to construction machines (12 million, no separate machine accounting):

Debit TK 623 – Credit TK 242 (12,000,000 đ).

When warranty period ends and provision exceeds actual cost, the difference is treated as …

An increase in other income (TK 711).

Recording wages for construction-team staff (overhead) 106.5 million:

Debit TK 627 – Credit TK 334 (106,500,000 đ).

Progress payments withheld by customer for warranty are normally credited to which account?

Credit TK 337 (customer retention).

Transferring completed construction to finished-goods warehouse:

Debit TK 155 – Credit TK 154.

Creating a provision for future repair & warranty of a construction project:

Debit TK 627 – Credit TK 352.

Recognising cost of a completed project handed over to customer (560 million):

Debit TK 632 – Credit TK 154 (560,000,000 đ).

Account TK 621 at period end usually has what balance?

No ending balance; it is fully transferred to cost accounts.