How to Record First Article Testing Costs
Captures the labor and material costs specifically associated with First Article Testing (FAT) requirements on a defense contract.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| WIP - First Article Testing | Asset | 12,500.00 | - |
| Direct Labor - Engineering | Expense | - | 8,000.00 |
| Direct Materials | Asset | - | 4,500.00 |
💡 Accountant's Note
FAT is often a separate line item or milestone. This entry reclassifies direct costs to a specific work-in-process bucket for the test unit prior to acceptance.
Practitioner & Systems Framework
💻 ERP Architecture
Use a unique Project Task or Work Breakdown Structure (WBS) element for FAT activities.
⚠️ Audit Flags
Incorrectly expensing FAT units as R&D instead of contract-specific WIP.
📄 Required Documentation
Work orders, lab reports, and the FAT approval certificate from the government representative.
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Expert Analysis by Qusai Ahmad
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Discussion & Community Questions
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