On 5th March 2019, Mehta Brothers received 100% advance for goods, to be supplied
in the next month. The Cost of the goods was Rs50000. They usually sells the goods at
10% mark up. (5 Marks)
Answers
Answer:
...................................
Answer:
Identification of Income here is an Accrued Income.
Explanation:
Income Identification:
This income has been accrued. Revenue that has been earned but not yet received is referred to as accrued income.
Examples include interest earned by a company but not received at the conclusion of the financial year and dividends declared by a company but not yet received.
Treatment of accumulated income:
It has been recorded as "Dividend Income" on the credit side of the profit and loss statement. It has been listed as an Asset on the Balance Sheet (Current Asset). because it represents a profit for the current accounting period, it is shown on the credit side of the income statement and displayed under the heading "Current Assets" on the balance sheet's asset side.
Particular Debit/Credit Impact:
The increase in assets is debited from accrued income. The increase in revenue is credited to the income account credit.
Record in journal:
- 05TH March 2019 Dividend Receivable a/c Dr 500
- To Dividend income a/c Cr 500