AMC INCOME

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faru faru (Querist)
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01 May 2011 sir my company is an engineering company. we have amc incomes.
suppose we enter into an amc contract with our client for Rs 10,000 payable in two instalments (6 months) then how will the income be recorded?
plz reply ASAP

CA SAURABH GARG

CA SAURABH GARG (Expert)
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02 May 2011 Book Rs. 5000/- as and when accrued.

Book in every 6 month as per agreement.

faru faru

faru faru (Querist)
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02 May 2011 i have a better idea...

1/4/2011 SUNDRY DEBTORS A/C DR. 5000
TO DEFERRED AMC INCOME 5000

1/4/2011 DEFERRED AMC INCOME A/C DR. 1000
TO AMC INCOME 1000

THIS ENTRY WILL BE MADE IN EACH MONTH TILL RS. 5000 IS FINISHED FROM DEFERRED INCOME A/C

NOW AFTER 6 MONTHS AGAIN WE WILL PASS THE ENTRY

SUNDRY DEBTORS A/C DR. 5000
TO DEFERRED INCOME 5000

NOW EACH MONTH WE WILL AGAIN BE PASSING THE BELOW ENTRY TILL THE AMT IN DEFERRED INCOME IS FINISHED:

DEFERRED AMC INCOME A/C DR. 1000
TO AMC INCOME 1000

V.Rajan

V.Rajan (Expert)
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03 May 2011 Better way would be to debit the Company for the full amount crediting the AMC Income Account. If it crosses over to next year the proportionate amount can be credited to Advance Income account.
When cheque for Rs.5000/ is recd Bank account is debited crediting parties account
(Both times)

faru faru

faru faru (Querist)
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05 June 2011 are my entries correct?????