Adjustment entry
This query is : Open
Guest
Guest
(Querist)
02 December 2013
Can u please advice me regarding the case where payment is made by the debtor on behalf of the company to the creditor.eg Company purchased from A and makes sales to B.Now B is making payment to A on behalf of the company.Company passed the following adjustment entry
Creditors A/c Dr.
To Debtors A/c
Is there any Tax implications involved in the above case ??if yes what would be the consequence??Please do reply your views at the earliest.
Creditors A/c Dr.
To Debtors A/c
Is there any Tax implications involved in the above case ??if yes what would be the consequence??Please do reply your views at the earliest.
Manish Bhandari
(Expert)
02 December 2013
Document the above entries with supporting as the instructions to debtor to pay durectly to creditor as any settlement advice. Also a confirmation form creditor as to receipts on companys behalf from the debtor.
If transaction is proved genuine then no Tax implications. Also the amount outstanding of debtor should be justified.
If transaction is proved genuine then no Tax implications. Also the amount outstanding of debtor should be justified.
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