Entry is mandatory in books of account

 mandatory entries should be as follows .

Advance paid to Creditors ABC company on 31/3/22 .

Advance ABC & Co  A/c Dr ( Asset ) 5000
To Bank A/c Cr 5000
( Advance payment to ABC company)

On 31/3/22  Advance ABC company A/c will be carried forward to next year.to 1/4/22.

When you receive Invoice  pass entry

Purchase A/c Dr 10000
To ABC company A/c Cr 10000
( Booking of an expense)

When you make balance payment

ABC company A/c Dr 10000
To Advance ABC company A/c Cr 5000
To Bank A/c Cr 5000
( payment made after adjustments)

Advance paid to any person debit that person cr. bank. Any adjustment it will be managed internally.

You cannot understand my point

ABC Co. Dr......5000
To Bank...........5000
(Being Advance Given)...

Now in Balance sheet ABC Co. show Dr bal of Rs. 5000

when you receive invoice and make payment

than e.g invoice of Rs. 12,000

than Purchase Dr.....12,000
To ABC Co...............12,000

now bal shown in ABC will be 7000 cr. (i e payable)


Now make bal payment of rs. 7000

pass entry.. ABC Co ....7000
To Bank ....7000

Now baln of ABC ..will...NIL

@ Nidhi Madam -just confirming 

He has made 5000/- Advance payment on 31/3/22 ( asset side ) , that we have to carried forward, and adjust next year at time of payment, other wise same 5000/- will remain unadjusted at the end of year as Advance payment asset side .

As per your reply first entry should be or not 

Advance to ABC & co  Dr  5000 ( Asset )

To Bank  A/c  Dr   5000

(  Advance payment ) 

Querist has mentioned in query ,  Dr balance of  Creditors due to Advance payment  

Nothing to do leave as it's