Accounts settlement

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manohar (Querist)
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14 April 2013 Dear sir
I have a payable a/c (supplier)and i made a payment on 01/02/13 Rs.200,000/- and the supplier deliver material only for Rs.150,000/- and invoice received for Rs.150,000/- and balance material they will supply on 30/04/12. my question end of 31/03/13 (year ending) the diff amount (Rs.50,000/-)how i will adjust this amount because my payable a/c going to minus figure so for the year ending what are the entries i have to pass to solve this problems. please help me

thanks

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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15 April 2013 The excess paid amount shall treat as Advance paid for Material purchases. For this purpose either you can grouped such supplier account under current assets as on 31-3-2013 then the balance will be positive and the time of such material received pass the following entry i.e on 30-4-2013 pass the entry

Purchases a/c dr 50000
To Supplier a/c 50000
(Being purchases made against the advance made through invoice no.XXX)

Then supplier balance will be zero.

Instead of grouping supplier account under current assets on 31-3-2013 you can pass the following entry

Advance to material a/c dr 50000
To Supplier a/c 50000
(Being the balance amount receivable from the supplier against the material receiving from him is treating as advance paid to Material since transfer)

Then supplier account will be zero on 31-3-2013. Advance to material a/c shall be grouped under current assets.

On the date of receipt of material i.e on 30-4-2013 pass the following entry

Material a/c dr 50000
To Advance to material a/c 50000
(Being material purchased from the supplier against excess amount paid to him and which is treated as advance paid amount now the material received and adjusted)

OM SAI SRI SAI JAI JAI SAI

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