Customer deposit cash in current account as a advance for material. please suggest which entry in books of account is write. Bank account. Dr. customer account cr. (receipt entry)
Cash account Dr. customer account. cr. (receipt entry)
Bank account. Dr. cash account Cr. ( contra entry)
Replies (13)
Quick Summary
This discussion clarifies the proper accounting treatment for a customer depositing cash into a current account as an advance payment for materials. The consensus leans towards treating it as a cash receipt, with specific journal entries recommended to accurately reflect the transaction in the books of account. The conversation also touches upon practical considerations and potential software glitches in recording such entries.
@ Lotus Choudhary, The last two entries are correct like u pointed out. To think, mind can play tricks sometimes, but when you sit in front of tally, this is what I will do pragmatically. ERP / work processes overrides subconsciousness or gist and other accounting things.
Glad to know that. Sometimes, ppl are preoccupied, can’t understand the question or answer it in a hurry without analysing the situation while at home. Anyways, accountants are allowed to make mistakes and that is why materiality threshold and rectification of errors standard exists. In India it can be enforced 100% because Indian depression rates due to hot climate isn’t high. No one can be blamed.
Forgot to tell my experiences, I graduated as a topper of this world ie., 100 marks in all modules and joined a company. Soon, when I enter this transaction
Bank a/c 1090
To Sales a/c 1090
due to some technical glitch, the software recorded it as
Bank a/c 1000
To Sales a/c 1090
Initially it is fine, but down the lane, every company has some problem like this, I don’t care what it is until corrections team finds out about it. I studied to work and not to tire myself on technical issue because it will make me tired to be alert 24/7, but I am willing to do my best. This theory is applicable to everyone and people feel the same like I said.