General accounts

This query is : Resolved

pkkapoor (Querist)
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20 October 2010 We are very often giving advance to our employees. At the time of settlement, we pass journal voucher for book adjustment. Like if an amount of Rs. 5000 has been given as advance and he has incurred expenditure of Rs. 5500. BPV is passed accordingly debiting the expenditure head for Rs. 5500 and crediting staff advance for Rs. 5000 and crediting bank account for Rs. 500. A cheque is acordingly drawn in favour of employee for Rs. 500.
In this connection my query is:

(i)Is is proper to make adjustment through BPV?
(ii)Should we make a JV for staff adjustment and a Bank Payment voucher for payment of Rs. 500?

Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
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21 October 2010 (i)Is is proper to make adjustment through BPV?

Yes. It is proper to do that way.

Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
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21 October 2010 (ii)Should we make a JV for staff adjustment and a Bank Payment voucher for payment of Rs. 500?

This is just an alternative but requires 2 documents and is inefficient. So the former method is better.
Pls note, both are fine, but the first method is better.

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