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malarvannan (accounts executive)     07 July 2011

Advance paid- entry

Dear friends

Our company is a trading co., we give advance payment to the suppliers for the purchase of material

ex:- abc ltd- supplier

Order value   : 10000

Advance payment: 30% on order value i.e.3000/-

How to made entry for advance payment given.

 As per my knowledge- i create new ledger- advance abc ltd., under current assets.Once we recd material 

agst material we will adjust the payment. is it right?

Pls clarify...its urgent

Regards

malarvannan.d



 4 Replies

CA ADITYA SHARMA

CA ADITYA SHARMA (CA IN PRACTICE )     07 July 2011

abcltd, ac -- - - - - - - - -dr. 3000

  to cash/ bank

(being sdvance paid)

CA ADITYA SHARMA

CA ADITYA SHARMA (CA IN PRACTICE )     07 July 2011

no need to create new ledger you can made payments in the abc ltd. ac. , as it is the account of creditor 

1 Like
Deepak Gupta

Deepak Gupta (CA Student)     07 July 2011

Originally posted by : malarvannan

Dear friends
Our company is a trading co., we give advance payment to the suppliers for the purchase of material
ex:- abc ltd- supplier
Order value   : 10000
Advance payment: 30% on order value i.e.3000/-
How to made entry for advance payment given.
As per my knowledge- i create new ledger- advance abc ltd., under current assets.Once we recd material 
agst material we will adjust the payment. is it right?
Pls clarify...its urgent
Regards
malarvannan.d

No need to create a separate advance payment ledger. Pass the following entry

1) For advance payment

Supplier A/c………..Dr

To Bank A/c

(Note for accounting in tally: Activate maintain bill by bill detail and select Advance under method of adjustment/Type of Reference)
.
2) For purchase of material

Purchase A/c……….Dr

To Supplier A/c

(Select Against Reference for method of adjustment/Type of Reference and select the advance payment voucher made earlier. Supplier account will automatically be adjusted and will show outstanding payable for the balance amount)

Indira Priyadarsini Kota

Indira Priyadarsini Kota (Student)     29 January 2021

There is no need to create a seperate ledger account. The entry will be as follows:

ABC ltd a/c......Dr. 3000

To Bank                 3000

At the time of actual transaction: Purchase a/c Dr. 10000

To Supplier             3000

To Bank                   7000


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