Construction
Over-Billing (Billings Exceed Revenue Earned)
Recording the liability when the amount invoiced to the client exceeds the revenue actually earned based on completion.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Billings in Excess of Revenue (Liability) | Liability (+) | - | 50,000.00 |
| Contract Revenue | Revenue (-) | 50,000.00 | - |
💡 Accountant's Note
If a contractor bills ahead of actual work done, the excess is a liability (deferred revenue). This is common in front-loaded payment schedules. It represents an obligation to perform future work.
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