Accounting entries
This query is : Resolved
13 April 2020
Accounting entry for the land purchase from general reserves.
15 April 2020
Land A/c Dr
To Seller
Seller A/c Dr
To Bank
15 April 2020
General reserve is just Account but corresponding real amount will be there in cash or cash equivalent or any other assets..
15 April 2020
So it will be normal entries
15 April 2020
If you have maintained seperate bank account to maintain the general reserve in the form of bank balance then you can give effect to that particular bank account
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22 May 2020
Yes. It will be normal entries. If you had credited any specific reverse for land purchase after the purchase is completed it needs to be reversed.
Question: A business wants to reserve funds for a future building construction project. It credits a Building Reserve fund for INR 5 million and debits retained earnings for the same amount. The building is then constructed at a cost of INR 4.9 million, which is accounted for as a debit to the fixed assets account and a credit to cash. What happens when the building is completed?
Answer: The original entry is reversed, where INR 5 million will be debited to the building reserve account and credited to the retained earnings account.
Question: A business wants to reserve funds for a future building construction project. It credits a Building Reserve fund for INR 5 million and debits retained earnings for the same amount. The building is then constructed at a cost of INR 4.9 million, which is accounted for as a debit to the fixed assets account and a credit to cash. What happens when the building is completed?
Answer: The original entry is reversed, where INR 5 million will be debited to the building reserve account and credited to the retained earnings account.
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