Treatment of advance taken for a specific period

dear sir,

 

I have a client having business of property dealing. it had started business in FY 2011-12.

Procedure of business is that " Assessee takes amount in advance and gives offer to his client whether take the amount with interest or take a property after maturity i.e. after 1 year or 2 year.

 

now problem is that if a custemer gives advance today althogh we have cash balance throgh which we can incure administrative expenses but we are booking it as sell. in this case company  final accounts is showing big loss.

 

i want to know whether this treatment is correct or there is any other way of accounting.   

Replies (1)

One of my client also have same business. In this case we account for sale when the sale deed is executed and we have commission to broker as major expenditure. We book it as advance commission paid & transfer it to P&L when the Sale Deed is execued. You can follow the same method for major expense heads in your clients case.

 

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 29 October 2026
Article Assistant (CA Inter / CMA Inter) - Thrissur

Varma Raja & Associates

Thrissur

CA Inter

View Details
Company
08 October 2026
Accounts and Tax Associate

POOJA R TELI & CO

Pune

CA Inter

View Details
Company
16 October 2026
CA article trainee

Zerdi & Co. Chartered Accountants

Pune

CA Inter

View Details
Company
12 October 2026
AUDIT , ACCOUNTS AND TAXATION

KDSS

New Delhi

B.Com

View Details
Company
Featured ARTICLESHIP 28 October 2026
CA- Inter and Articles

N N V Satish & Co.,

Hyderabad

CA Inter

View Details
Company
21 October 2026
CA INTER/ BCOM WITH EXPERIENCE

CA S KUMAR GUPTA & CO

Amritsar

CA Inter

View Details
Company
ARTICLESHIP 28 October 2026
Article assistants

Shyam S Gupta and Company

New Delhi

CA Inter

View Details
Company
12 October 2026
Finance

I-Genext Consulting Private Limited

New Delhi

CA

View Details