31 August 2010
Penalty is deducted from the contractor for non-compliace as to terms of agreement. What would be treatment of penalty in the books of accounts. Whether is be shown as deducted from the respective expenses or booked as miscellaneoue income. Please advice.
31 August 2010
As per As-9 (Revenue Recognition)we can't adjust our income if it is once recognized. If there is any change in income u have to pass separate entry. So applying the same concept on Exp as per my knowledge Penalty should be recognised as Extraordinary Income..
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