Hello Gurus,
I am new to accounts and learning it through you.
I want ot understand some voucher entries. Please
suggest me correct.
Let's take a scenario. A company Sales some products.
The sale is made to different Parties. All parties
has deposited some advance (here I assume full advance)
The company has to maintain Balances of all parties.
Here is two methods ( 1 and 2) with two cases each
(Please correct if I am wrong in any entry)
Method 1 : Using Advance A/C
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Case A (When Advance is given by XYZ party) as Cash
Cash A/C Dr 100
To Advance A/C 100
Case B (When a Sale is settled with XYZ's Advance)
Advance A/C Dr 100
To Sale A/C 100
Metod 2 : Using Party A/C
===================
Case A (When Advance is given by XYZ party) as Cash
Cash A/C Dr 100
To XYZ A/C 100
Case B (When a Sale is settled with XYZ's Advance)
XYZ A/C Dr 100
To Sale A/C 100
I think Method 2 is good (b'cos Balance of each aprty
will be maintaned and I can see the ledger of any party
and in narration I can put Recipt No. for refference.
While Method 1 can tell only consolidated Advances by
parties.
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Is there any method, pleaes tell me.
Thanks
CAclubindia
