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Please help xperts

Accounting Entries 1287 views 18 replies
Originally posted by : Biswaranjan Moharana


Your question :

what if due to some reasons we have to increase discount on debtors upto 60,000, as we have already given 50,000 discount but now in the moth of april we think we have to increase this discount in order to get payment fast.. so my question is that in which year will will pass journal entry for additional provision for discount on debtor i.e rs. 10,000

Do we pass this under mentioned entry in 2011-2012 or in 2012-2013????

P/L a/c Dr – 10,000

To provision for dis on debtor Cr. 10,000

 

Ans :

Again you are confusing with single transaction.

 

All discount allowed, to all suppliers will need to be accumulated in Discount allowed account.

 

At year end we see what was earlier provision ?

through out the year what is our total discount allowed to all cuomers.

 

Any excess need to further debited to P & L account, any shortage / savings ( not utilised) will get credited to P & L acct.

 

For closing provision pass separate entry P & L dr  to Provision fo rbaddebt

 

Now your questtion in which year

 

You only change your policy to increase discount from 50,000 to 60,000 in april, 2012  only. So all adjustments will be made at 31st March 2013.

 

 

i would like to give  thanks to  Mr  Biswaranjan Moharana  for spending his precious time in helping others.. thanks you soo much.... 

 


Its my Pleasure !

Pls feel free to ask any doubt related Acct, Costing, Fin Mgt.

Thank you

Originally posted by : Biswaranjan Moharana


Provision need to be made due to Principle of Conservatism. there is no difficulty in recognising the provision amount also.

 

In our View the follwoing will be the entry.

When sales is made :

Debtors acct  Dr.  5,00,000

        To Sales acct           5,00,000

 

At year end , provision need to created , if not earlier maintained

Profit & Loss acct   Dr.  50,000

       To  Provision for Discount of Debtors acct     50,000

At year end provision to be shown under teh head currentliabilities & provisions

 

In next year , when cash received

 

Bank Acct    Dr.  5,00,000

    To Detors acct    5,00,000

 

Again at year end the requirement of provision for discount will e reviewed,

 

case 1 : Total provisin say required is rs 60,000.

Already we have 50,000, so further 10 000 may be created

 

P & L acct   dr  10,000

    to provision for disc  10,000

 

Case 2 : Provision for disc reqd is say Rs 20,000,

we have surplus rs 30,000 to be transfeed to  P & L acct  as prior period item ( below line )

Entry

 

Provision for doubtful debt   Dr. 30.000

    To P & L acct.                         30,000

 

 

 

i have 2 more doubts----

1- how will i pass journal entry in tally 7.2 for above provision which we made as on 31 march 2012..

 

2- according to my question , on 5 april 2012 this will be the correct entry isnt it????

 

Bank A/c Dr    450000

disc A/c  Dr      50000

To- Debtor                      500000

 

  

1. In Tally, Pls consult some one else. We work in SAP. Moreover, my self work in Purchasing Dept.

 

2. Entry on 5th April is correct.

 

Thank you


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