Construction
Subcontractor Back-Charge
Deducting costs from a subcontractor's payment for remedial work or damage they caused.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Accounts Payable (Subcontractor) | Liability (-) | 5,000.00 | - |
| Work-in-Progress (WIP — Cost Recovery) | Asset (-) | - | 5,000.00 |
💡 Accountant's Note
When a subcontractor causes damage or forces the main contractor to perform remedial work, the cost is 'back-charged' by deducting from the sub's next payment certificate. It reduces the WIP cost for the project.
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