1. Why is there a "deferred income" in revenue receipts and
similarly in spending there is a "temporary expenditure" and both
accounts will affect what reports
2. At the beginning of the fiscal year, in the Budget
Implementation Document (DPA) the allocation of the Revenue and
Expenditure Budget is known Service A as follows:
I. Revenue:
1). Parking Levy IDR 25 M
2). Ret. Rent heavy equipment IDR 50M
3). Market Retribution IDR 50 M
II. Shopping:
1). Employee Shopping IDR 150 million
2). Shopping for goods / services IDR 50M
3). Expenditures for activities / capital. Rp.150 million
As for transactions during January (beginning of the fiscal
year) as follows:
1). Revenue Transaction
5 January, Treasurer of Receipt, receiving deposits from PDL
parking fees 15 million
15 January, Treasurer Receipt, receiving heavy equipment levies
deposit of Rp. 25 million, 5 days later deposited to the Regional
Treasury in the amount of Rp 20 million
18 January, Paid to the local treasury parking fee of IDR 10M
20 January, Paid directly to the regional treasury market levies
IDR 25M
Answer:
Deferred Revenue refers to the unearned revenue. These are the prepayments made by the customers for which the company has to provide the products or services to the customers in near future. Deferred revenue is a liability for the company and has to be reported on the balance sheet and the same should be transferred to Income statement proportionally as and when the services are provided or products are sold. If the goods/services are not provided to the customer then the company have to pay the money back to customers. Deferred revenue are recognized through US GAAP and accounting conservatism principle.
Temporary Expenditure are the expenses or the costs that the company incurs for running the day to day operations of business.
Both the accounts i.e. Deferred Revenue and Temporary Expenditures affect "Income Statement".
Deferred Revenue from above - 15 Million + 25 Million = 40 Million - Liability would be created in Balance Sheet for the mentioned amount.
Temporary Expenditure - 20 million + 10 million + 25 million = 55 million - Expense in Income Statement.
1. Why is there a "deferred income" in revenue receipts and similarly in spending there is...