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how to handle paid in advance to a supplier


Nagendran (development)     03 December 2009

Nagendran
development 
 26 points

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 hai friends,

i need to know how to handle the paid in advance to a supplier in accounts.

an example  journal entry for paid in advance to a supplier

Ansari

Ansari (ca final)     03 December 2009

Ansari
ca final 
 3 likes  444 points

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At the time of advance payment

Loans/Advances     A/c           Dr.

       To, Bank/cash A/c

At the time of Purchases

Purchases             A/c             Dr.

        To, Suppliers   A/c

At the time of payment

Supplier        A/c                   Dr.

       To, Loans/Advances          A/c

       To, Bank/cash                  A/c

-----------------------------------------------------------------------------------------------------------------------------

        Loans/advances a/c shall b shown under Assets side of Balance Sheet.

        However, u can also Dr. Suppliers A/c at the time of advance payment.

Nagendran

Nagendran (development)     03 December 2009

Nagendran
development 
 26 points

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 thanks for your reply friend...

i had one doubt... 

actually suppliers will comes under the account head of "sundry creditor"

how can v write the journal as loans/advances

Ansari

Ansari (ca final)     03 December 2009

Ansari
ca final 
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Dr.  the suppliers a/c at the time of advance payment

u can also open a new a/c as Suppliers (Advances) A/c.

1 Like
Pranjal

Pranjal (Article)     04 December 2009

Pranjal
Article 
 52 points

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u may Debit suppliers a/c and credit bank or cash a/c with this effect supplier has debit balance and when purchase made  than debit purchase a/c and credit supplier a/c. for ex. adv. paid 50000 to supplier. entry is

                     supplier A/c Dr.  50000

                           To Bank A/c               50000

purchase made for Rs 60000 than entry is

                         Purchase A/c Dr.          60000

                              To Supplier A/c                    50000

                              To Bank / Cash                    10000

in last the effect will be same. 

Sachin Kumar

Sachin Kumar (Account Executive)     23 April 2014

Sachin Kumar
Account Executive 
 21 points

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Advance paid to suppilier for printing & stationery Rs 1000 and remaining 15000 paid by cheque to supplier

please confirm the entry

Tanvi

Tanvi (Student)     17 April 2015

Tanvi
Student 
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At the time of making advacnce :-

Advance a/c Dr.  1000

          To Cash A/c    1000

Suppliers A/c Dr.     1000

          To Advacnces A/c       1000

At the time of making Purchase :-

Purchase A/c Dr. 16000

        To Supplier A/c     16000

At the time of making payment :-

Supplier A/c Dr.     15000

         To Bank A/c        15000

 

chandra sekar

chandra sekar (Manager-Accounts)     06 January 2016

chandra sekar
Manager-Accounts 
 8 likes  387 points

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when yu are paying advance agst purchases, don`t use A/C head " Loans and Advances", which belongs to group , Current Assets. YU can debit the supplier itself and adjust, when final payment made.

'

Srinivas Ch

Srinivas Ch (Sr.Accountant)     28 January 2016

Srinivas Ch
Sr.Accountant 
 20 likes  325 points

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Tanvi I agree with you, But small & beautyful think is USING THE COST CENTER IN TALLY ON THE NAME OF SUPPIER WILL REFLECT THE ALL ENTRIES.

Neethi V. Kannanth

Neethi V. Kannanth (.)     20 January 2021

Neethi V. Kannanth
. 
 32 likes  1715 points

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What is the journal entry for repayment of rental advance when a part of it is adjusted against rent and repairs and maintenance?


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