Sale of investments

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Querist : Anonymous

Querist : Anonymous (Querist)

08 April 2013 Which account head should be debited in the case where the sale of shares is made before the end of financial year but the amount is recovered after the end of the financial year ??
I think the account head credited would be investments but which account head would be debited ??

CA Krunal

CA Krunal (Expert)

08 April 2013 Party account will be debited as this would be receivable in your books as on particular date. Kindly ensure that all other formality for transfer of shares completed to evidence its sale.

Querist : Anonymous

Querist : Anonymous (Querist)

08 April 2013 Sir i m not clear . .
Example - If I sell the shares of abc co ltd on 28/3/2013 and my broker is xyz and I received Money On 2/4/2013 . So now Which account head should be debited .. whether xyz or abc or investment Receivable and what would be the Group Heading ..in Final Accounts like Investments or Current Assets ???

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

22 July 2025 Great question! Here's how you should handle the accounting when you sell shares before the financial year-end but receive payment afterward:

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### Situation Recap:

* **Shares sold on 28/03/2013** (within financial year 2012-13)
* **Payment received on 02/04/2013** (next financial year)
* You want to know:

* Which account to debit on sale date?
* How to classify it in final accounts?

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### Accounting Treatment:

**On the date of sale (28/03/2013):**

* **Credit: Investments account** (to remove shares from your books)
* **Debit: Broker/Receivable account** (amount receivable from broker or buyer)

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### What account to debit?

* **If you sold shares through your broker (e.g., broker XYZ), debit the Broker's account** (if broker holds the amount temporarily).
* Alternatively, if sale proceeds are directly receivable from buyer, debit **Debtors or Receivables** account.
* The account debited represents **amount receivable as on the sale date**, i.e., an asset.

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### Group Heading in Final Accounts:

* The **debit side (Receivable/Broker's account)** is a **Current Asset** as you expect to receive cash shortly.
* The **Investment account credited** is under **Investments (Non-Current Assets)** and will reduce accordingly.
* So, at year-end, you will show:

* **Investments:** Net investments after sale
* **Receivables/Broker:** Amount due from sale (current asset)

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### Entry Example:

| Date | Account | Debit (Rs) | Credit (Rs) |
| --------- | ---------------------- | ---------- | ----------- |
| 28-Mar-13 | Broker's Account | XX,XXX | |
| | To Investments Account | | XX,XXX |

*On receipt of cash on 02-Apr-13:*

| Date | Account | Debit (Rs) | Credit (Rs) |
| --------- | ------------------- | ---------- | ----------- |
| 02-Apr-13 | Bank Account | XX,XXX | |
| | To Broker's Account | | XX,XXX |

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### Summary:

* **Debit Receivable/Broker account on sale date** (Current Asset)
* **Credit Investments account on sale date**
* On payment receipt, debit Bank and credit Receivable/Broker account.

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If you want, I can help you prepare a journal voucher or a full ledger format for this transaction!

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