Accrual Accounting



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1) What if their is no contract pd. and transaction happens in same month?

2) Suppose contract is for 10 lacs (june11-aug11). Adv 5 lacs recd. in June2011. Total exps. is 4 lacs for the contract. What amt. is recognized on Aug2011 when rest 5 lacs payment is made.

3) Plese give Accounting entries for all the transactions for all the months.

Thanks

1 Answer(s)


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If transaction happens in the same month, then full revenue and expenses are included in the same month and nothing is accrued.

If equal amount of work is done over a period of 3 months then the 10 lacs will be split equally over the 3 months

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