A simple accounting query

Harinder (student) (219 Points)

01 January 2011  

We have paid security deposits to our Suppliers, which is refundable. While accounting for security deposits paid is it possible to show the same amount under Assets in Balance Sheet and as well as in the Supplier's account while the deposit is still with the supplier / before refund. Please give the entry if possible.

Entry, i thought of:

Security Deposit - Supplier (Asset) A/c

       To Bank A/c

 

and

Supplier (creditor) A/c

          To Security Deposit - Supplier (Asset) A/c

 

But this will nullify the Security Deposit - Supplier (Asset) A/c

or

just

 

Supplier A/c

     To Bank A/c.

Here, the Security Deposit - Suppler (Asset) A/c will not be raised, which is I think is incorrect to apply.