Dear Sir, A person engaged in business of selling of agricultural product ( Wheet, paddy, Cotton) on commission basis ( arthia), i.e., purchase agricultural produce from farmers and sale it to market via KRISHI MANDI. sometimes he give advance to farmers for their house hold activities. Now question suppose Mr. a is farmer in books of account under sundry debtor Dr.balance as on 31.03.20 is Rs.230000/- earlier last year 2019-20 We used manual books But in 2020-21 we used tally package so as on 31.03.21 Mr. a has Cr. balance is Rs. 119320/-so can I change group Debtor to creditors
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Quick Summary
This discussion explores the accounting treatment for farmers when dealing with a commission agent (arthia) who sells agricultural produce. The core question is whether a farmer, initially showing a debit balance (debtor), can be reclassified as a credit balance (creditor) after subsequent transactions, particularly when advances are given. The consensus leans towards maintaining separate classifications based on the nature of the transaction: debtors when goods are sold to them, and creditors when goods are purchased from them. However, the unique role of a commission agent, whose income is solely commission, introduces a nuance where flexibility in classification might be considered.
as suggested some one commission agent (Kacha arthia) works as difference from other works he is not maintaing trading account his Only income is commission on behalf agricultural product.so you can change debtor's and creditors as per your convenience.