Amount received in another firm

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This query is : Resolved

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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)

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

(Expert)

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)

07 June 2026 Thanks ....but what would be the proper journal entry ?

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