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Question: Aloka Innovative Business Solutions Pvt. Ltd,
an HR outsourcing company based in Hyderabad provides temporary staff to ABC Management College, Hyderabad. The company entered into following transactions with ABC Management College and the hired employee. The company would provide an employee for the college at Rs.30000 per month. ABC Management College prepaid the amount for the period January to June 2015 in December 2014. The financial year for the company ends in December. Aloka pays salary of Rs.
20,000 to the employee one month late as per contract with the employee. How do you record the above transactions in the books of Aloka in the months of December and January? Conclude what are the benefits of the term of contracts they have entered with the two parties.
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