Balance Sheet for Motor and Truck
We typically reflect revenues from Motor & Truck Rental Services in the Balance Sheet for Motor and Truck in India as follows:
1. Income Category:
The company considers the revenues generated from Motor & Truck Rental Services as part of its operating income.
We include them under the “”Revenue”” or “”Sales”” section of the income statement (also known as the Profit and Loss Statement or P&L).
This section accounts for the company’s total earnings from its core operations, which includes income from renting out motor vehicles and trucks.
2. Accounts Receivable:
When a customer avails of the rental services, an invoice is issued for the rental charges.
If the payment is not received immediately, we record the amount due as an account receivable in the balance sheet.
This represents the amount of revenue that the company has earned but has not yet received in cash.
We list it as a current asset since we expect to convert it into cash within a relatively short period, usually within a year.
3. Deferred Revenue:
In certain cases, if we receive the payment for the motor and truck rental service in advance.
We recognize it as deferred revenue.
This liability item on the balance sheet indicates that the company owes the customer a service (the rental service) in the future.
As we provide the service over time, we gradually recognize the deferred revenue as earned revenue in the income statement.
The balance sheet draft reflects the revenues from Motor & Truck Rental Services through accounts receivable for unpaid services and deferred revenue for advance payments.
These entries help provide an accurate representation of the company’s financial position and its obligations to customers.
To visit: https://www.mca.gov.in/
For further details access our website: https://vibrantfinserv.com
