Question

The work shall be judged by contractee's architect, surveyor or engineer who issue a certificate, stating the value of work done so far. This certificate is called:

• A. General work
• B. Work certified
• C. Work uncertified
• D. Managerial work

Hint:

The value of Work Certified is credited to the Contract Account and shown as work-in-progress on the asset side of the balance sheet.

Answer 1

The Correct Option is B

Step 1: Understanding Progress Valuation in Long-Term Contracts:
Because construction contracts can take years to complete, contractors cannot wait until the final handoff to receive payment. Instead, they bill the contractee in installments based on physical progress.

Step 2: Explaining the Certification Process:
To ensure progress is billed fairly, the contractee appoints an independent expert (an architect, surveyor, or structural engineer) to visit the site. This expert inspects the work, calculates the monetary value of the completed progress according to contract rates, and issues a formal progress certificate.

Step 3: Defining the Core Accounting Terms:

• Work Certified (B): The portion of completed work that has been formally approved and certified by the expert.
• Work Uncertified (C): Work that has been physically completed by the contractor but has not yet been inspected or certified by the expert at the cut-off date. Based on this distinction, the certificate described in the prompt is called “Work certified” (B).