Bill received but Entry after receive amount

Tahir Amini (3 Points)

26 October 2021

How I make this entry in accounting software

Example

50000 Advance is given to Mohan. (Payment Entry)

Now

He expanse the amount create 30000 bills with receipt and send to us.

How I keep the record that 30000 bill has been received from Mohan. (But Advance still 50000).

When bill checked and after approved 28000 has been transferred to firm account. When 28000 received than how do entry to actual bill received and now Mohan balance is: 22000.

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3 Replies

prasad Nilugal (Sr . Accountant and GST Practitioner . ) (7518 Points)
Replied 26 October 2021

Create ledger Advance to Mohan A/c , under Loans and Advance , Asset side Balance sheet .

When you pay Advance to Mohan pass entry .

Advance to Mohan A/c Dr 50000/-
To Bank. A/c Cr 50000/-
( Being advance given to Mohan )

when expense approved and bill submitted
then pass entry

Expense A/c Dr 28000/-
To Advance to Mohan A/c Cr 28000/-
( Being Expense adjusted against advance given)

Balance 22000/- will be reflect to his ledger.