Prepaid income and provision for income

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Mahesh

Mahesh (Querist)
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13 August 2018 Pls give examples for Prepaid income and Provision for income.

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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13 August 2018 Prepaid Income is an accounting concept that refers to a payment that has been received, but the asset has not yet been fully delivered, EG: advance received from debtors for supply or services.

Provision for Income is estimating of Income from all heads advance tax is worked out based on provisions of income.

Mahesh

Mahesh (Querist)
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13 August 2018 Sir, thanks for valuable and timely reply.
Pls give some example for Accrued income.

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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14 August 2018 Accrued income is income which is earned during the year physically not received, EG. Interest on FD if it is falls between two different financial year, Bank will give interest on FD till end of Financial year but interest income. Actually received during Maturity it will be added to FD,
Accrued income is taxable in the year of which accrued.

Mahesh

Mahesh (Querist)
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15 August 2018 sir, thanks for valuable and timely reply.

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