Hello members,
Can we accept payment from customers and disburse it to sellers later on like an ESCROW from a normal current account? If yes, then How do we show such transaction entries in our current accounts?
Advance thanks!!
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Can we accept payments and disburse it to sellers like an escrow from a current a/c?
Replies (5)
Are you service provider (cash collecting agent)....... then how can the 'principal' be 'sellers'?
Yes sir, I am the service provider between sellers & buyers. And initially I want to continue cash collecting service through my current account only. So kindly guide, what entries should i show in my current account while receiving & releasing the payments. Somewhere in CAclubindia community I read, ESCROW payments are not treated in Income or expenditure. So where should we show them?
Correct. The amount collected on behalf of principal gets debited to his account in toto. So, only commission received over the service will be part of your income.
Sir, really thanks for the reply but I am unable to understand this term Toto and it is not showing up on google too. As a Taxpayer kindly respect my ignorance and reply to my confusion accordingly. Thanks!!
'IN TOTO' means entirely, or totally. (latin word for 'on the whole')
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