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accounting treatment

mohammed lateef (article ) (101 Points)

28 March 2010

hello friends,

Help me what is the accounting treatment for the following example Suppose i have taken a chit from a company for Rs 2500000/- every month i have to pay 50000/- Rs towards it now past 4 month iam paying 32500/- Rs only and iam getting a dividend of Rs 17500/- but the company is crediting me with 50000*4months 200000/- Rs the dividend amt anyways decreases every month till the payment of it and i have to pay for 50 months so, what will be the treatment for this as now iam paying only 32500/- towards chit i should consider it as fixed deposit only and the dividend which iam getting from the company should i consider and recognise or not plz help if some more infomation required plz reply me.

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3 Replies

(Guest)

are you getting dividend from continous last four months ??

(Guest)

company declared divd. once a year but you are getting from last four months . pls specify!

mohammed lateef (article ) (101 Points)
Replied 28 March 2010

sorry friends it's not dividend it's commission every month actually 50000/- i have to pay for 50 months which will make 2500000/- but past four months iam paying 32500/- only but the company is crediting me for 50000/- the remaining balance 50000-32500/- = 17500/- iam getting as commission should i recognise it or the amt which iam paying 32500 only should be considered as fixed deposit.