in contract costing, profit on sale of plant is shown in which side 0f contract
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Contract costing is a specialized system of Job costing applies to long-term contracts as distinct from short-term jobs. Contract costing is mainly applied in civil construction and engineering projects, ship building, road and railway line contracts, construction of bridges etc.
Contract costing is a form of Specific order costing. It is applied to contracts where substantial time is taken to complete the contract and it falls into different accounting periods. However, a duration of exceeding one year is not an essential feature of a long-term contract. Some contracts with a shorter duration than one year should be accounted for as long-term contracts if they are sufficiently material to the activity of the period.
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