What will be the entry, when
1. Patient deposit money to path lab for some test?
2. That path lab is running as franchise basis.collect Rs.100 from patient & give main lab Rs.58 for test, how to account for?
Thanks in advance
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Clear my Doubts
Replies (3)
Quick Summary
It's sorta agent commission principle relationship.
Path lab will debit bank and credit sales
Eg
Bank Dr. 42
Sales cr. 42
And the rest is transferred to lab. If you want to record it then
Bank Dr. 100
Sales cr. 42
Bank Cr. 58
When a path lab running on a franchise basis collects Rs. 100 from a patient and gives the main lab Rs. 58 for the test, the following entry will be passed:
Cash/Bank A/c/Accounts receivable Dr. Rs.100
To Franchise Commission Received A/c Rs.42
To Main Lab A/c Rs.58
Accounts receivables? Ok your fine here. But in general accounting terms it's creditors or payables. Indas rule! In reporting we don't put up creditors and debtors names.
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