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We get income in advance. We debit AR and credit deferred income. Auditor insists we should record AR only when rental period starts. Please advice.

We bill our clients in advance. Some pay well before the rental period even starts. On raising invoice AR is debited and deferred income is credited. Every month proportionate income is taken to 

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Question added by Tony Thomas , Finance Controller , Khazna Data Center Limited
Date Posted: 2015/11/05
Suranjith Chathuranga Warnakula
by Suranjith Chathuranga Warnakula , Accounts Cum Admin Executive , AL Tebah General Contracting Co.

You can Maintain this through Provisional Income Account. 

Auditors right any Income received will be recorded in advance and there will be an account normally created by any company

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