Please Help: Revenue recognition and to do entry of such situation..?
Posted Date : 25-Jun-2012 , 05:14:36 pm | Posted By: Arpit A. Shah
Category :
Accounts | Answers :
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How to recognise revenue in this situation ?
In some businesses some savings installment scheme runs to sale product by adding one more installment in all installments. Now how to record so much big amount of sale in one or two days...of whole period installment.
Example: A jewellery shops run such savings scheme of installment amount of Rs. 1000 for 11 months and by adding 1 more installment amount , in total of Rs. 12000 sale gold to each customer in the end of scheme. Now if its run for 300 customers then in total it amounts Rs. 36,00,000. Now how to record such receipts/sale in the accounts???
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| Comments |
| Posted By : |
02-Jul-2012, 03:24:27 |
| In my opinion there are two types of revenue will arise in this case. One is sales and another is interest. The amount of Rs 12000 is not only the sales but also includes interest. So interest may be separated from the above value as it is an indirect income. The actual value of sales (i.e. 12000 less interest) will be credited to sales account, interest will be credited to interest account and the customer account will be debited with Rs 12000. Please comment if am wrong. |
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| Posted By : Krishna Chandra Santi |
02-Jul-2012, 02:54:09 |
| In my opinion there are two types of revenue will arise in this case. One is sales and another is interest. The amount of Rs 12000 is not only the sales but also includes interest. So interest may be separated from the above value as it is an indirect income. The actual value of sales (i.e. 12000 less interest) will be credited to sales account, interest will be credited to interest account and the customer account will be debited with Rs 12000. Please comment if am wrong. |
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| Posted By : Krishna Chandra Santi |
02-Jul-2012, 02:46:21 |
| In my opinion there are two types of revenue will arise in this case. One is sales and another is interest. The amount of Rs 12000 is not only the sales but also includes interest. So interest may be separated from the above value as it is an indirect income. The actual value of sales (i.e. 12000 less interest) will be credited to sales account, interest will be credited to interest account and the customer account will be debited with Rs 12000. Please comment if am wrong. |
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| Posted By : Krishna Chandra Santi |
02-Jul-2012, 02:40:45 |
| In my opinion there are two types of revenue will arise in this case. One is sales and another is interest. The amount of Rs 12000 is not only the sales but also includes interest. So interest may be separated from the above value as it is an indirect income. The actual value of sales (i.e. 12000 less interest) will be credited to sales account, interest will be credited to interest account and the customer account will be debited with Rs 12000. Please comment if am wrong. |
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| Posted By : AMITABH AGARWAAL, ADV. |
28-Jun-2012, 08:26:37 |
| All the eleven instalments are advances recieved. Sale is executed when we are delivering goods & generating the Sales Bill. So that will be the sale date for taxation purpose. Sale must have to be shown on that day only. For your ease you can choose date maturity date in middle of month so that you can get proper time for calculations & rceipt generating. The sale amount is the total of instalments received. Moreover you are enjoying the amounts so recd & even the tax amont held with you. Thanx. |
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| Posted By : Saurabh Goyal |
26-Jun-2012, 09:01:00 |
| in my openion 12th installment amount can be recognised on propsnate bases that means reconnise the same according to amount of equal 11 installment. |
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