12 May 2016
sir, we (proprietor) are running a Hotel having Room Rental business only, we received advance amount from guest before they arrive,
we want to know whether we should follow cash basis of accounting or mercantile / accrual basis.
If we followed cash basis when we should prepare invoice. on receipt of advance amount or on completion of service basis.
12 May 2016
you have to mercantile method due to your income taxable under income from business & profession. you have to keep ledger as advance agst booking.
CAclubindia
