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Journal Entries of Paying Expenses on the behalf of Others

30 April 2019

hello sir/mam

i am paid traveling expense on behalf of my friend Chirag

now I get cheque from Chirag for that payment

what is the journal entry for that

regards

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40 Replies

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 30 April 2019

in your books

on payment made

Chirags A/c Dr
To Bank

On receipt of payment

Bank Dr
To Chirags A/c

1 Like

RAJA P M ("Do the Right Thing...!!!") (127140 Points)
Replied 30 April 2019

(i am paid traveling expense on behalf of my friend Chirag)
Who is expend the traveling...?
Who will account the expense ?

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 30 April 2019

are you incurring the travel exp.I think not because you are paid on behalf of your freind.
you are just paying it and receiving it back so no expense from your side. your freind will book the expenses

Mitesh Patel (75 Points)
Replied 30 April 2019

yes sir it's Chirag expense

thanks sir

Rajnish Goel (70 Points)
Replied 30 April 2019

in ur books

payment entry
chirag a/c Dr
to bank/cash

recept from chirag
bank/cash. Dr
to chirag

in chirag's books

expenses A/c. Dr
to you(name)

payment

you(name). Dr
to Bank/cash

Mitesh Patel (75 Points)
Replied 30 April 2019

sir this type of payment ( behalf of others)
transaction can be valid ?
is it correct to do them ?

because on traveling bill payment bank is my ?
and I am not show them in my expense

is it correct in income tax of view ?

Rajnish Goel (70 Points)
Replied 01 May 2019

see my journal entries.. we are not booked expenses. we are giving amount to chirag and after that received from him

it is valid transaction

RAJA P M ("Do the Right Thing...!!!") (127140 Points)
Replied 01 May 2019

Yes...

It's just transaction. No more effects in the BS and PandL. So, It's a valid transactions...

Neethi V. Kannanth (.) (19015 Points)
Replied 20 January 2021

What is the journal entry for per diem paid? should it be included in salary paid to employees?

Ayush Lakhotia (43 Points)
Replied 18 May 2021

What is the journal entry of cash received from a person on behalf of another? Please tell me a group also for proper understanding

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 18 May 2021

Try bills of exchange method where the drawer is the seller and drawee is the customer.

X spent on behalf of Y

In your books

Drawee’s personal accounts a/c

To Bank/Cash a/c

in his book:

Bank/Cash a/c

To Drawee’s personal a/c

when your friend accepted to pay his bills,

in your books:

Accounts receivables a/c

To Drawee’s personal a/c

in his books:

Drawers personal account a/c

To Accounts payable a/c

when he finally settles his expenses with you,

in your books:

Cash/Bank a/c

To Accounts Receivable a/c

in his books:

Accounts Payables a/c

To Cash/Bank a/c

this means he has settled his borrowings with you.

https://www.playaccounting.com/explanation/bill-of-exchange/accounting-for-bill-of-exchange/

Chirag is the drawer, you are the drawee.

Ayush Lakhotia (43 Points)
Replied 18 May 2021

What is the journal entry of cash received from a person on behalf of another? Please tell me a group also for proper understanding but we recived money from behalf of debtors from another company please tell me a entry of tally

Ayush Lakhotia (43 Points)
Replied 18 May 2021

What is the journal entry of cash received from a person on behalf of another? Please tell me a group also for proper understanding and we received money from XYZ Behalf of debtors ABC