Assistant Accountant
751 Points
Joined May 2012
n books of A : entry for payment made to B on behalf of C entry 1 (making payment) B A/c Dr to Bank / Cash entry 2 (interparty) C A/c Dr to B A/c In books of B : entry 1 (receiving payment) Bank / Cash A/c Dr to A A/c entry 2 (interparty) A A/c Dr to C A/c In books of C
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In the books of A
1. B A/C dr. (Dr.the receiver)
To Cash A/C (Cr.what goes out)
2. Interparty transaction
C A/C dr (which rule to apply ??)
To B A/C
In the books of B
1. Cash A/C Dr. (Debit what comes in)
To A A/C (Credit the giver)
2. Interparty transaction
A A/C dr (which rule to apply ??)
To C A/C
In the books of C
B A/C Dr (Debit the receiver/Debit when Liab decreases)
To A A/C (Credit the giver/Credit when Liab increases)