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Revenue recognition
A Tour operator take advance for booking of tour and service will be performed later, my quiery is that when will i recognize income in books of accounts.
Replies (2)
According to the Basic 'Accrual' Assumption of Accounting, Incomes & Exoenses are recognized on accrual basis. Therefore while taking advance for booking of tour, Entry will be:
Bank A/c. ...dr
To Advance Customers
(Being advance recd for performance of service)
Now when Service will be performed, entry will be:
Advance customers. ....Dr
To Revenue
(Being services performed agnst advance recd)
Thanks for ur reply
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