Basic query in accounting
This query is : Resolved
07 October 2013
Whether below answer is correct based on AS-9
Q.Living media has received 1 lakh subscriptions during the 2002-2003 under its scheme wherein the readers were required to pay a sum of Rs 2000 and they will be entitled to receive ‘india Today’ for 5 years.The accountant of the enterprise has treated the entire amount as revenue for the current year.
Ans:20,000 every year deferred and recognized on a straight line basis.
I will be very much thankful to you.
Q.Living media has received 1 lakh subscriptions during the 2002-2003 under its scheme wherein the readers were required to pay a sum of Rs 2000 and they will be entitled to receive ‘india Today’ for 5 years.The accountant of the enterprise has treated the entire amount as revenue for the current year.
Ans:20,000 every year deferred and recognized on a straight line basis.
I will be very much thankful to you.
07 October 2013
Yes it is. you are supposed to park the entire money as advanced received. the sales should be recognised on monthly basis.
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