friends, ihave a doubt about revenue recognition, whenever we received indirect income(eg.,commission,etc)when will we booked in p&l a/c, at the time of cash recept or occuring?
please reply friends
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revenue recognition
Replies (6)
HI,
IF U R FOLLOWING CASH METHOD THEN IT SHOULD BE RECORDED ON RECEIPT AND IF U R GOIN ON MERCANTILE THEN ON DUE BASIS....................
| Originally posted by :prasanth | ||
| " | friends, ihave a doubt about revenue recognition, whenever we received indirect income(eg.,commission,etc)when will we booked in p&l a/c, at the time of cash recept or occuring? please reply friends |
" |
IT IS CONSIDERED WHEN WE ACTUAL RECEIVED
HI
IT IS ADVISABLE TO FOLLOW MERCHANTILE SYSTEM OF ACCOUNTING (i.e) ON ACCURAL BASIS.SO COMMISSION, INTEREST INCOME SHOULD BE ACCOUNTED ON ACCURAL BASIS.
As per company law it is mendatory to follow Accrual basis of accounting so revenue income/expenditure are recognized when occuring other wise in Cash basis accounting it is recognised at the time of receipt/payment
>> Rajesh
IF U R FOLLOWING CASH METHOD THEN IT SHOULD BE RECORDED ON RECEIPT BASIS AND IF U R FOLLOWING MERCANTILE THEN ON ACCRUAL BASIS.
For Co's its mandatory to follow Accrual system.
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