EXCESS AMOUNT RECEIVED AGAINST SALES

This discussion addresses how to handle an excess amount received from a party against a sale. If a customer pays more than the invoiced amount, the extra funds should be treated as an excess receipt. The recommended accounting entry involves debiting the bank account, crediting an 'Excess Receipt' account (shown as indirect income in the P&L), and crediting the trade debtors' account for the original sale amount. Alternatively, the excess can be returned to the debtor or adjusted against future payments.