fund for specail fund.
This query is : Resolved
14 January 2017
dear sir,
In govt department fund is receiving for specail purpose as well as salary and other office exp is also utilising from that. what will be accounting treatment while receiving the fund and transferring for specail purpose and for exp?
15 January 2017
Rahul, I think it would be a fair treatment to consider it as deferred income when the funds are received. Each time the related expenses are recognized in the P&L we could recognise the same amount as other income also.
15 January 2017
i welcome your suggestion sir.
Let me clear some more thing.
will deferred income treated as current liabilities?
At the time of receiving
Bank a/c .....dr.
To deferred Income...
at the time of transfer with respective department
deferred income a/c .....dr.
To Bank A/c
for expense
Exp.....dr
To bank A/c
and the same amount of exp I will transfer from deferred income
Deferred income a/c......dr.
To Other Income.
Rest amount of deferred a/c will be opening balance of next year.
Please correct me if I am wrong anywhere...
Let me clear some more thing.
will deferred income treated as current liabilities?
At the time of receiving
Bank a/c .....dr.
To deferred Income...
at the time of transfer with respective department
deferred income a/c .....dr.
To Bank A/c
for expense
Exp.....dr
To bank A/c
and the same amount of exp I will transfer from deferred income
Deferred income a/c......dr.
To Other Income.
Rest amount of deferred a/c will be opening balance of next year.
Please correct me if I am wrong anywhere...
16 January 2017
Deferred income as current liabilities - You should read the agreement between the parties to know the duration of spending the funds and classify it as current if its within one year or if its more than one year classify it as long term liabilities.
I thought all the fund will be received for spending for our expenses. Since that not the case don't use the term deferred income use some thing like "Special funds". All the entries are reasonable and rest of funds will be opening balance for next year
I thought all the fund will be received for spending for our expenses. Since that not the case don't use the term deferred income use some thing like "Special funds". All the entries are reasonable and rest of funds will be opening balance for next year
18 January 2017
Ok Sir, thanks for your reply and your suggestion will really work while implementing those thing.
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