account entry

i am maintaining the account of educational society which is register under the society act any one solve my problem .

this institute takes fee from the student a forward it to university, university give back the 20 % amount to the society. in the agreement as per the memorendum of the society. the total fee which will society get from the student will be forwarded to university. my question is if the total receipt of the society mean the total fee of the society is 1,2500000/- this amount forward to university and 20 % of this amount is refund to the society as the commission which type of account enry should i make?

in my point of view my entry should be like this :

on  the receiving of the fee :

Dr.   Cash/Bank

Cr.              To  Fee Received

On the given back to university the above fee :

Dr.    Fee Paid

Cr.           To cash/ Bank

        ( For Fee Given to University )

On the receiving of the commission :

Dr.   Cash/Bank

Cr.            To Commission

Kindly let me know amn i right ? 

Replies (4)

 yes, correct

Amar, the entries suggested by you are right but  I think it can also be passed as

Cash/Bank Dr.

To University (specify name)

(on receiving fee)

 

University Dr.

To Cash/Bank

(on transferring the fee to university)

 

Cash/Bank/university  Dr.

To Commission

(on receiving/accruing commission from university)

 

The above answer is based on the assumption that commission is the only source of income of the institute.It receives fees on behalf of university & refund the same to university.

 

Though both the set of journal entries are o.k.  But the second one provided by Ms. Anjali seems to be better.

Mr. Sharma is right.

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