Which treatment of gst on advance payment is correct ?
This query is : Resolved
24 June 2017
Suppose 5% GST rate is applicable on the goods we sell. Now we have taken rs 105 as 50% advance(100+5 for GST) from customer.& Sales value is 200.
Option 1:
Upon receiving advance payment:-
Bank a/c dr 105
to GST pay. on adv 5
to Customer 100
GST pay. on adv dr 5
to Bank a/c 5
At the time of making sales:-
Customer dr 205
to Sales 200
to GST payable 5
GST payable dr 5
to Bank 5
Option 2:
Upon receiving advance payment:-
Bank a/c dr 105
to Customer 105
GST paid on adv dr 5
to Bank a/c 5
At the time of making Sales:-
Customer dr 210
to Sales 200
to GST payable 10
GST payable dr 10
to GST paid on adv 5
to Bank a/c 5
Please reply !
Option 1:
Upon receiving advance payment:-
Bank a/c dr 105
to GST pay. on adv 5
to Customer 100
GST pay. on adv dr 5
to Bank a/c 5
At the time of making sales:-
Customer dr 205
to Sales 200
to GST payable 5
GST payable dr 5
to Bank 5
Option 2:
Upon receiving advance payment:-
Bank a/c dr 105
to Customer 105
GST paid on adv dr 5
to Bank a/c 5
At the time of making Sales:-
Customer dr 210
to Sales 200
to GST payable 10
GST payable dr 10
to GST paid on adv 5
to Bank a/c 5
Please reply !
24 June 2017
Option 1 is the right entry.
24 June 2017
Option 2 will be the better accounting practice.
28 June 2017
Please suggest me the correct option !!
03 August 2025
https://docs.google.com/document/d/1NDYkhp85ogblt-8pdkehJ0xeLSGztdEg_Dhw0TwtkME/edit?usp=sharing
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