diff --git a/internal/util/files.go b/internal/util/files.go
index 956f16316..47e3268dd 100644
--- a/internal/util/files.go
+++ b/internal/util/files.go
@@ -47,13 +47,13 @@ func AbsolutePath(basePath, relativePath string) string {
 	return filepath.Join(filepath.Dir(basePath), relativePath)
 }
 
-// IsPathLocation returns true if the location is a file path (contains .cdc)
+// IsPathLocation returns true if the location names a Cadence source file.
 func IsPathLocation(location common.Location) bool {
 	stringLocation, ok := location.(common.StringLocation)
 	if !ok {
 		return false
 	}
-	return strings.Contains(stringLocation.String(), ".cdc")
+	return filepath.Ext(stringLocation.String()) == ".cdc"
 }
 
 // NormalizePathLocation normalizes a relative path import against a base location
diff --git a/internal/util/util_test.go b/internal/util/util_test.go
index 6df8f35af..aed480837 100644
--- a/internal/util/util_test.go
+++ b/internal/util/util_test.go
@@ -22,11 +22,28 @@ import (
 	"strings"
 	"testing"
 
+	"github.com/onflow/cadence/common"
 	"github.com/onflow/flow-go-sdk"
 	"github.com/stretchr/testify/assert"
 	"github.com/stretchr/testify/require"
 )
 
+func TestIsPathLocation(t *testing.T) {
+	for _, tc := range []struct {
+		name string
+		want bool
+	}{
+		{"contracts/Example.cdc", true},
+		{"contracts/Example.cdc.backup", false},
+		{"contracts.cdc/Example", false},
+		{"Example", false},
+	} {
+		t.Run(tc.name, func(t *testing.T) {
+			assert.Equal(t, tc.want, IsPathLocation(common.StringLocation(tc.name)))
+		})
+	}
+}
+
 func TestIsAddressValidForNetwork(t *testing.T) {
 	testnetAddr := flow.HexToAddress("8efde57e98c557fa")  // Valid testnet address
 	emulatorAddr := flow.HexToAddress("f8d6e0586b0a20c7") // Valid emulator address