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Querist : Anonymous

Querist : Anonymous (Querist)

12 September 2013 Dear Sir,
Suppose a civil contractor has received a cheque of Rs 15 lacs on 27 March 2013 and for which contract was executed in April 2013.
Therefore on 31/03/2013 that amount remained as balance in his bank a/c and increased the assets side of balance sheet. Now please advise me how to make equal the liability and assets side of balance sheet.
Do I have to Show WIP in liability side with the figure of 15 lacs?

Please clarify.

CA Mohit Bansal

CA Mohit Bansal (Expert)

12 September 2013 "Advance received from customer" on liability side

CA Pallav Singhania

CA Pallav Singhania (Expert)

12 September 2013 Agree with Expert,

It will shown as Advance from Customer on the Liability side..

Querist : Anonymous

Querist : Anonymous (Querist)

12 September 2013 Actually this contract was taken in fy 2012-13 and 90% work was executed in the month of April 2013 on back date basis.

Then it can not be said as advance the what excuse I should use in liabilty side.

CA Pallav Singhania

CA Pallav Singhania (Expert)

12 September 2013 Progress payments and advances received from customers may not necessarily reflect the stage of completion and therefore cannot usually be treated as equivalent to revenue earned.

CA Pallav Singhania

CA Pallav Singhania (Expert)

12 September 2013 It depends what concept you follow.....

Querist : Anonymous

Querist : Anonymous (Querist)

12 September 2013 Thus it is good to show it as advance

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