Outstanding Income & Advance income - Will it be shown in
P&L..? In b/s which side, it will be shown..?
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Answer Posted / sameer
1. outstanding income = accrued income ( right defination )= income earned but cash not received. eg rent not received by the end of the book closure or accounting period, Journal entry.Rent (income) will go on cr. side of P&l and Rent receivable will go to B/S under Current asset.
rent receivable Dr.
To rent (income) a/c
When we receive rent in cash the entry will be
Cash a/c Dr.
To Rent receivable.
2. Advance Income = defered Revenue = cash received in advance but goods and services not sold/ provided eg
rent received in advance. rent advance a/c will go to current liability side of B/s
cash a/c dr
To rent adv a/c
When rent is charged
rent adv a/c dr
To rent (income) a/c
the amount by which rent is charged will go to p&l and rest of the blce will remain in rent adv will remain in b/s
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