Advance from customer against purchase of jewellery

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 September 2014
Please let me know whether a customer given a advance towards purchase of Jewelllery to a Jewellery Shop ( Pvt Ltd Co)but after one year the said customer has not taken delivery of the ornament as a result the advance is still lying in the books of company. Whether the advance will treated as deposit under new companies Act or it will treated as advance against property.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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04 September 2014 it will be treated as income only and not deposit if customers doesnt turn up

Querist : Anonymous

Querist : Anonymous (Querist)

04 September 2014 How we can assertion the income because the sale proceed not done for the sake of argument if the Jewellery shop converted the advance amount to revenue then when the customer physically come to the shop for adjustment of advance what will be the accounting treatment in the books of account of the company.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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04 September 2014 when that customer comes then u need to take it as sale

the way if ur money is lost when customer doesnt pay then u take it a loss as bad debts in profit and loss so now here payment made is income not sale as u havent given the jwellery

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