Amount received in another firm

This query is : Resolved

Quick Summary

When Firm A sells goods but payment is mistakenly received in Firm B, the sale and GST remain in Firm A. Firm B should record the amount as received on behalf of Firm A through an inter-firm/current account and transfer the funds to Firm A with proper accounting entries.

Allauddin Patel

Allauddin Patel (Querist)
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07 June 2026 Sir / madam ...we have two firms A & B ...
We sold goods from firm A to party and party credited amount to our firm B , how to handle this and what will be entries ?

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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07 June 2026 Since the goods were sold by Firm A, the sale and GST liability will remain in Firm A. The amount received in Firm B should be treated as money received on behalf of Firm A and credited to an Inter-firm Account/Current Account. Thereafter, transfer the funds from Firm B to Firm A through proper journal entries.

Allauddin Patel

Allauddin Patel (Querist)
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07 June 2026 Thanks ....but what would be the proper journal entry ?

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