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Contractee’s A/c, Under this method Contractee’s Account is debited by work certified and credited by cash received every year., The balance will be equal to retention money which is carried forward.The account appears as above.

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Contractee’s A/c, Under this method,Contractee’s Account is credited by cash received every year., Cash received is treated as an advance which is carried forward year after year., On Completion of the contract, Contractee’s Account is debited and Contract Account is credited by contract price., The balance is settled.

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Extract of P & L A/c for the year ended

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Extract of Balance Sheet as on