EXCESS AMOUNT RECEIVED AGAINST SALES

we had sold goods to one of our party of Rs 350000 in fy 20-21 but party credited our account of Rs 360000, so how to treat that excess rs10000 received if we want to close account in this year?
Replies (2)
Quick Summary
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.

Show  Rs 10000/-  as  Excess  receipt A/c   under  Indirect  Income  in P&L  Account  . 

Pass entry 

Bank        A/c     Dr                       360000/- 

To Excess  Receipt   A/c   Cr                                10000/- 

To  Trade  Debtors    A/c   CR                             350000/- 

( Being  payment  received  against  Invoice No  Dt.....) 

If wrongly or by mistake credited to account , then return to Trade Debtor's , or adjust in the next receipt of payment from Debtor's . If no objection from Debtor's then pass above entry .

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