What does CIP stand for in accounting

Construction in Progress (CIP) is an accounting account that monitors expenses related to the construction of fixed assets. It is used by organizations when building new facilities, expanding existing ones, or constructing new machinery. CIP accounts are utilized by various industries such as healthcare, manufacturing, retail, aviation, science, research, aerospace, and technology. To use CIP accounting, it is important to identify and record expenses related to the construction process, ensuring accuracy and proper documentation. All expenses from the project should be entered as debits in the CIP account and logged as credits in accounts payable. Once the project is complete, the expenses for those assets can be transferred to the proper fixed asset account.