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Accounting of asset

n ganesh (10 Points)

11 December 2020

Mr A purchased a asset but payment done by third party can we account it as asset in our books

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6 Replies

BISHNU MOHAN NAYAK (Student) (82 Points)
Replied 11 December 2020

Yes you must account if you are able to derive economic benefit out of it and how much third part pays for that asser can be measured.

prasad Nilugal (3914 Points)
Replied 11 December 2020

Also if Tax Invoice is in the name along with business address of Mr A , then A can account asset in the books of A even if payment is made by third party . it's libility of A to pay back to Third party .

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JATINDER KUMAR (Accountant) (3662 Points)
Replied 11 December 2020

Yes, you can

When book asset

Asset A/c Dr.
To Third Party A/c

when payment to third party

Third party A/c Dr.
To Bank

Kutub Hamid (118 Points)
Replied 12 December 2020

In all this answer, it is possible if the invoice is in name of Mr. A
but if it in name of third party, then ask the third party to raise invoice in name of mr. A with all taxes
as this may be raised in audit with reference to related party a/c
and also Gst rule issue.

Aditya Patidar (9 Points)
Replied 13 December 2020

Yes Of invoice is made in the name of A and if invoice is made in the name of third party then you cant directly for that third party permission required so show that transactions in third party books also

JATINDER KUMAR (Accountant) (3662 Points)
Replied 13 December 2020

Please ignore my previous reply

When book asset

Assets A/c Dr.
To Party A/c

when payment made by third party

Party A/c Dr.
To Third Party A/c

When payment made to third party
Third party A/c Dr.
To Bank