What is the meaning of "normal course of business"?

479 views 5 replies

As per Revised Schedule III -  A payable shall be classified as 'trade payable' if it is in respect of amount due on account of goods purchased or services received in the normal course of business. 

Should Rent payable and Legal fee payable (both are indirect expenses) to be considered as services received in the normal course of business or not? Should it be classified under Trade Payable or Other Current Liabilities?

Replies (5)

Yes, these are trade payables.

Can u please elaborate on how you have concluded?

Can u please elaborate on how you have concluded?

Can u please elaborate on how you have concluded?

In 'normal course' means day to day and recurring transactions entities do to run business, and their customs and practices. The activities may be direct or indirect w.r.t. principal activity, however, it doesn’t mean that the indirect activities are not in the normal course.

Trade payables or accounts payables are creditors for goods or services.


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register