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(Revenue recognised on sale of remaining 15,950 units
(25,950 - 10,000). Amount paid by the customer will
be the balance amount after adjusting the excess

paid earlier since, Nthe customer falls now in second
slab)
3. Liability (1,08,700 – 86,124) Dr. 22,576

To Revenue A/c [25,950 x (80-79.13)] 22,576

(On reversal of liability at the end of the
financial year 2019-2020 i.e. after completion of

stipulated time)

Alternatively, in place of first two entries, one consolidated entry may be passed as follows:

Bank A/c (25,950 x ₨ .80) Dr. 20,76,000

To Revenue A/c (25,950 x ₨ .79.13) 20,53,424
To Liability (25,950 x ₨ .0.87) 22,576
(Revenue recognised on sale of 25,950 units)

nd
Note: In 2 journal entry, it is assumed that the customer had paid balance amount of ₨ .11, 76,000 after adjusting excess
₨ .1,00,000 paid with first lot of sale of 10,000 unit. However, one can pass journal entry with total sales value of ₨.12,76,000 (15,950

units x ₨ .80 per unit) and later on pass third entry for refund. In such a situation, alternatively, 2 and 3 entries would be
rd
nd
as follows:
Bank A/c (15,950 x ₨ 80) Dr. 12,76,000

To Revenue A/c (15,950 x ₨ 79.13) 12,62,124
To Liability 13,876
(Revenue recognised on sale of remaining 15,950
units (25,950 - 10,000))
Liability (1,08,700 + 13,876) Dr. 1,22,576
To Revenue A/c [25,950 x (80-79.13)] 22,576
To Bank 1,00,000
(On reversal of liability at the end of the financial
year 2019-2020 i.e. after completion of
stipulated time and excess amount refunded)

Q26. (NOV. 20)
An entity negotiates with major airlines to purchase tickets at reduced rates compared with the price of
tickets sold directly by the airlines to the public. The entity agrees to buy a specific number of tickets and

will pay for those tickets even if it is not able to resell them. The reduced rate paid by the entity for each
ticket purchased is negotiated and agreed in advance. The entity determines the prices at which the airline
tickets will be sold to its customers The entity sells the tickets and collects the consideration from customers
when the tickets are sold; therefore, there is no credit risk to the entity.
The entity also assists the customers in resolving complaints with the service provided by airlines.
19. 26