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Incomes Received in Advance

These refer to incomes of the next period received in the current period. They are also referred as un-accrued income. In other words, unaccrued incomes are those which are received but not earned during the current accounting period.

Impact on financial statements

  • In Profit and Loss Account, incomes received in advance will be deducted from the respective incomes as they are not related to the current year
  • In Balance Sheet, income received in advance is shown as a liability

The following journal entry is passed:





Debit (₹)

Credit (₹)


Respective income A/c           Dr.




   To income received in advance A/c


Note: The above entry will be reversed in the subsequent period

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