In our transportation company we have sold tyres that are purchased in current year but the buyer release the payment in the following year is it necessary to post the provision entry.
for example we have sold the tyres for 300000/- in 29.03.11 and collect the payment on 05.04.12
this is not outstanding income. it is income of year ending 31-3-11
the entry should be
party ac- - - - -- - - - - - - - - --dr.
to sale of tyre ac.
next year entry will be
bank ac - - -- - - - - - - - -- - - - dr.
to party ac.
KK & Company Chartered Accountant
Pune
CA Inter
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Malhotra Rajesh & Associates
New Delhi
B.Com
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Chirag P Shah & Co. Chartered Accountant
Pune
B.Com
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CCI
Pro
CAclubindia
