dear all frnds, whenever indirect income occur and we receive the amount after 2 or 3 months
is it right give to debit to income receivable?(at the time of J.V)
is it right to give debit to the party as a debtor even though it's not a direct income?
and another option i have that, can we debit the party under the group of current asset
is it same about expenses
please clarify my doubts with any exaples, hope ican receive best answer
If there's an indirect income receivable whether it is direct or indirect it should be recognised immediately in the profit and loss account (but this income should not be contingent) but we can't show this amount under the head of sundery debtors if the party is not a sundry debtor insted we can show this amount as Misc. Income outstanding in the Balance Sheet. We can debit this party with the amount of income but we shouldn't classify this party as a sundry debtor.
thank u very much vijendra
According to me Debiting income receivable account is correct entry for booking income will be
Income Recievable A/c Dr (e.g. Rent Recievable)
To Income A/c
M N Rao & Associates LLP
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