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Advance car Booking
Proprietor paid amount one party for advance booking for car purchase What is journal entry and which head in tally. Kindly guide experts
Replies (7)
Quick Summary
Dr Party a/c
Cr Bank a/c
Cr Bank a/c
Is this car for personal purpose or Business purpose ?. please clerify .
It's always advisable to book the bill or request for an estimated invoice.
Personal purposes. but it will be treated fixed asset
As per AS10 Fixed assets is an asset which held with intention of being used for the purpose of producing Goods or providing services for Business , so if you are using this car for personal purpose you can not show as Fixed Asset in the Balance sheet of the Business . AS 10 is restricting for that . Therefore if you are withdrawing money from Business for purchase of CAR same will be treated as Drawings of Sole proprietor .
Pass entry
1) Drawings A/c Dr
To Bank
( Being amount withdrawn from Business for purchase of CAR )
2) Drawing Transfer to Capital entry
Capital A/c Dr
To Drawing A/c Cr
( Drawings transfer to capital account )
please confirm with others also .
But previous car treatted as fixed asset
Discuss with your CA .
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