12 September 2013
Dear Sir, Suppose a civil contractor has received a cheque of Rs 15 lacs on 27 March 2013 and for which contract was executed in April 2013. Therefore on 31/03/2013 that amount remained as balance in his bank a/c and increased the assets side of balance sheet. Now please advise me how to make equal the liability and assets side of balance sheet. Do I have to Show WIP in liability side with the figure of 15 lacs?
12 September 2013
Progress payments and advances received from customers may not necessarily reflect the stage of completion and therefore cannot usually be treated as equivalent to revenue earned.