postponement of Income

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 September 2010 As the assesse is dealing with ltd. company for contract work. since the company is not giving the decided consideration during the entire year. and also not showing the credit to the assessee ledger account about the consideration entitlement. in other word company is not debited the expenses to their profit and loss account eventhough they have to follow the accrual basis of accounting. and as per the terms of agreement work were carried out by the assessee.
what to do in the books of assessee whether to show income as a receivable or to book the income on cash basis. as there is a certainity that company will give the income to the assessee.

CA Prashant Gupta

CA Prashant Gupta (Expert)
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20 September 2010 first of all that Ltd company account doesn't effect your accounts.
if you are using mercantile system then book it on accrual basis. if you are following cash system then book it on receipt basis.
this is your system not other things which effect your accounts. If you are on contract business of road, bridges etc then there will be running bills. again book it on your accounting system whether cash or mercantile.