24 June 2011
Pls tell me that what is the mean of AMC in accounting terms A interviewer ask me that tell me the journal entry of AMC while I cant understand the means of AMC
Guest
Guest
(Expert)
24 June 2011
AMC stands for Annual Maintenance Contract. It is a contract where any type of Maintenance work is allotted to any Contractor for a pre determined amount, irrespective of the amount of work actually carried by the contractor.
Normally the contract is for 1 year. Journal Entry would be same as if any Expense is incurred.
In case the duration exceeds 1 year, the proportionate amount would be debited in current year & balance would be carried forward in next year(s) as the case may be.
24 June 2011
Dear sunil, want to add more in this case, suppose agreement is for one year the expenses for first month will be expensesd out and remaining amount will treated as prepaid expenses. And month on month basis amount will be expensed out from prepaid expenses accounts.
CAclubindia
