Regarding lc

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 June 2016 Please provide me the information regarding entry to be passed in books of accounts in respect of Sales made against LC (90 Days). and contigent liablity in this respect if any arises. in B/S.

Rupesh Jain

Rupesh Jain (Expert)
Follow

30 June 2016 its two option if you are making the entry of LC when you open or you make entry when you make payment against LC. if you make entry on LC payment then you take contingent liability as on B/s date.

debtors a/c
to Sales

LC receivable
to Debtors.

on recd payment.

bank a/c
to LC receivable a/c

on opening of LC
you make entry of

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
Follow

30 June 2016 Sales made under LC and if you have discounted the same and got the money, then Contingent liability arises to the extend of discounted bill value till the LC bills paid by customer.

While Sales made

Dr: Debtors
Cr: Sales

While bill of exchange
Dr: Bill Receivable
Cr:Debtors

While discounting bill of exchange
Dr: Bank
Cr: Bill receivable

Upgrade to CAclubindia Pro. Subscribe Now!