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Advance adjustment

Zaif (Accountant) (26 Points)

12 June 2013

Hi All,

I have given 2000 Rupees advance for site operations to an engineer. but he has spent 300 Rupees extra on purchases.

Can any one help me how to adjust this extra expense of 300 Rupees in accounts or which Journal Entry i should pass.

Thank you for your cooperation and immediate response.

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6 Replies

veeru sagar (BBE,M.com,CA Final ) (468 Points)
Replied 13 June 2013

you have to passed these entries

(1) Engineer A/c 2000

To Cash / Bank A/c 2000

( At the time of payments to engineer)

(2) Purchase A/c ( Dr) 2300

To Engineer A/c 2000

To Cash/ Bank A/c 300

( At the time of purchase date)

Zaif (Accountant) (26 Points)
Replied 22 June 2013

Dear Veeru,

Thank you for your valuable response,

i want to show this whole amount of 2300 Advance to engineer as Advance in his account. like this below entries. Before recording Entry for this 2300, if i pass another Entrt as shown in (2).

Please correct me if i am wrong.

1) Purchase A/c 2000

Engineers A/C 2000 Cr

2) Engineers A/c 300 ( As Advance to Engineer)

Cash/ Bank A/c 300 Cr

3) Purchase A/c 300

Engineers A/c 300

Zaif (Accountant) (26 Points)
Replied 22 June 2013

Originally posted by : Zaif

Dear Veeru,

Thank you for your valuable response,

i want to show this whole amount of 2300 Advance to engineer as Advance in his account. like this below entries. Before recording Entry for this 2300, if i pass another Entrt as shown in (2).

I have attached GL A/C File for your reference.

Please Please correct me if i am wrong.

1) Purchase A/c    2000

              Engineers A/C    2000      Cr

2) Engineers A/c     300    ( As Advance to Engineer)

              Cash/ Bank A/c     300                      Cr

3) Purchase A/c 300

            Engineers A/c     300


Please reply me , as i am in difficult situation. Thank you once again

Attached File : 1080713 1191124 engineers account.xlsx downloaded: 147 times

Ishan kewlani (Article) (172 Points)
Replied 23 June 2013

Ur cash balance won't match if u show fake entry of advance of Rs. 300/-. So the entry suggested by Veeru Sagar is appropriate.

veeru sagar (BBE,M.com,CA Final ) (468 Points)
Replied 24 June 2013

dear Zaif

Cash never goes negative and as in ur excel sheet bcoz if u have not any cash in your cash book then how would you be able to expense that amount so that 1st you show the excess amount expensed by engineer received cash from engineer as advanceand after that show the entry of purchase....in such case ur cash will not be nagative and as i have suggest u the entry above case you can pass ...............