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Hi,
You received a grant for a staff recruitment project. The grant totaled $120.000 in number. You spread the grant over 2 years. At the end of the first year, you have deferred income of $60.000. A government audit reveals that some of the conditions that they laid out have not been met, and you must repay $80.000 of the grant.What is the journal vouchers ?
Debit income statement 60000.
Credit liability to government 60000.Debit deferred income 20000.
Credit liability to government 20000.When repayment to government is paid-
Debit liability to government 80000
Credit bank 80000.- Topics: 1
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hi
why did you debit the income statement? its not an expense!
you should’ve credited it then debited the deffered income
cheers
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