Advance payment in profit loss statement

som (construction) (34 Points)

01 January 2023  

The following trade happens between company A, B and C.

A supplies products to B. Only proforma invoice is given and payment is treated as advance. Tax invoice will be issued after reconciliation and that goes into next financial year.

B supplies products to C. Tax invoice is issued.

How does company B treat it in the profit and loss statement?

How does the advance accounted for ?