costs or operating expenses

The account of operations expenses or project costs is an account that is opened in contracting companies, where the costs of projects are charged to it, where these costs are matched with project revenues to reach the net profit or loss for each project or for projects every

A main account is opened in the accounts directory under the name

Operations expenses or project costs fall under these sub-accounts and are called cost centers, for example

The costs of the Faith Project

The costs of the Al-Amal Tower project

That is, an account is opened for each project that is charged with project expenses and each account of these accounts is poured into the main account (operations expenses or project costs) that is placed in the income statement to match the projects 'revenues to arrive at the result of the projects' works of profit or loss, either separately or Total projects.

The project is charged with the direct and indirect costs related to the project, which are:

Direct costs

Materials

Buying iron for the Faith Project, for example

The limitation is

10000 iron materials

          10,000 to / cash, bank or supplier

Then the project is charged at the cost of iron materials

10,000 h / operating expenses or project costs 10,000  / faith project

              10,000 to  / iron materials

Purchasing materials (cement) worth 10,000 for the Faith Project

Be the limitation

10,000  cement material

       10,000 to cash, bank or supplier

The costs of cement materials are charged to the project that is privatized, and the record is made

10,000  operating expenses or project costs

10,000 Faith Project

         10,000 to cement materials

Wages

The project is charged with its own wage costs. For example, if the wage costs of workers who work in the Faith Project are 100,000, the limitation is:

100,000 from wage costs

             100,000 to  cash or bank

And the project is charged with wage costs and there is a registration

From

100,000 operating expenses or project costs

100,000 Faith Project

           100,000 to wage costs

Indirect costs are the other costs that cannot be allocated to a single product or project, as they are divided among all projects, such as buying stationery for websites

The limitation is

From h / stationery

To cash, bank or supplier

It is charged to h / operation expenses or project costs, i.e. it is charged to the cost centers

From h / operating expenses or project costs

H / Faith Project

H / Al-Safa project

        To h / stationery

At the end of the year, the account of project costs or operating expenses is closed in the profit and loss account, until it is posted to the income statement in order to arrive at the result of the activities and projects from profit or loss.

In practice, and with the development of accounting programs, a cost center is opened for each project on the program, and when registering the entry, the project is charged with its costs in an easy way, and the migration is done and the rest is done automatically.