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Advance given treatment in accounts

Pranjal (Student CA IPC / IPCC) (531 Points)

24 November 2014

Suppose I have given an advance of Rs 10000 on 20th November and recorded in the payment side of the Receipts & Payments account. When I get the expense details later I"ll record the same on the payment side.But then do I need to show the advance given earlier on the receipt side?

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2 Replies

Gagan Deep Singh (CHARTERED ACCOUNTANT) (1190 Points)
Replied 25 November 2014

Yes. When u record the advance given on payment side as expense then it will automatically reduce ur advance balance and the reduced amount will come on receipt side.

Pranjal (Student CA IPC / IPCC) (531 Points)
Replied 25 November 2014

Thanks for the reply.Just to get more clarity if the expenses totals Rs 7500 then do I need to record the balance amount of Rs 2500 on the receipt side.