AA-31-Respective Accounts Name Required To Record Expense Entries

Page no : 2

My Videos (Accounts Officer ) (677 Points)
Replied 05 August 2023

Dear Nilugal Parsad Sir,

Thanks for detailed reply.

suppose, if advance receipt invoice is being issued 1st to customer then they release payment how will it be recorded ?

Actually my concern is that if advance invoice issued before receiving advance payment how we will record it ?

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Yasaswi Gomes new (Finance ) (4492 Points)
Replied 05 August 2023

If you gave advance receipt then you don't have to do anything. Or maybe you can for remembering the transaction you can make an

Dr. Advance receipt

Cr. Proforma sales

And when the amount is received

Dr. Bank

Cr. Receivables/advance receipt

Five step revenue recognition doesn't have a treatment with proforma sales but you can record this transaction in proforma statements. This is not deferred revenue as well.

My Videos (Accounts Officer ) (677 Points)
Replied 05 August 2023

Dear Yasaawi Gomes Sir,

as per my knowledge advance receipt is libilty which is payable on us to client. advance account will be debited and it's balance will nill when we make sale to client.

my concern is that when we issued advance receipt invoice before receiving advance form client how we will account it ?