sridhar (Accountant Executive) (30 Points)
18 September 2013Hi Gurus,
Computer & Accessories=37200 ( Fixed Asset)
We Paid Advance 15000 on 29/03/2013 ( current Asset)
Remaining Amount paid in April-22200 (current liability)
So
As on 31/03/2013 Which entries will come in Tally.
Which one Effect in P & l a/c
Rajiv Limbachiya
(Deputy Manager)
(140 Points)
Replied 18 September 2013
You have to make entry at the time of advance:
ABC (Supplier) A/c Dr
To Bank A/c Dr.
And as you are buying Computer, which is comes under fixed assets, so it will not affect in P/L account. So, you will have to make entry of computer purchase bill like this....
Computer A/c Dr
To ABC A/c Cr.
Shivani
(Learner)
(1881 Points)
Replied 05 October 2013
Sridhar
what is the date of invoice you received from seller?
shivani
Shivani
(Learner)
(1881 Points)
Replied 06 October 2013
29-3-13
1) Advance to ABC 15000 (Current Asset)
To Cash/Bank 15000
2) If bill received till 31-3-13, then on the date of receipt of bill
If bill received from ABC
Computer 37200
To ABC 22200
To Advance to ABC 15000
If bill not received from ABC till 31-3-13, then no entry on 31-3-13
3) April
if bill was received till 31-3-13
ABC 22200
To Cash/Bank 22200
If bill was not received till 31-3-13, then assuming that bill received on 15-Apr, entry on 15-Apr will be
15-Apr
Computer 37200
To ABC 22200
To Advance to ABC 15000
Now Assuming that payment made on 20-Apr
20-Apr
ABC 22200
To Cash/Bank 22200
Experts please confirm.
Shivani
Samrendra
(Asst. Manager- Internal audit)
(221 Points)
Replied 06 October 2013
Dear Shivani,
What if Machinery is delivered and used on 29th March but Invoice is received after 31st.
Conclusion: Recording of transactions are based on time of happening instead of receiving of documents.
Shivani
(Learner)
(1881 Points)
Replied 06 October 2013
samrendra ji
u must b pulling my leg on asking me this question.
u very well know I freak out on invoice thing.
lol
shivani
Samrendra
(Asst. Manager- Internal audit)
(221 Points)
Replied 07 October 2013
Dear Shivani,
In case stated above by me.......
If goods has received before reporting date but Invoice pertain to that goods is not received then goods has to include in books based on the receipt of goods to reflect true image of books.
Here in this case Fixed Asset is capitalized on 29th March instead of postponing the transaction.
For better understanding Entry will be like this
Fixed Assets A/c Dr. xxxx
To Provision for Purchase xxxx [classification Current Liability]
(being fixed assets received and used from xyz but invoice does not received)
In April upon receipt of Invoice
Provision for Purchase A/c Dr. xxxx
To XYZ xxxx
(being Invoice for fixed assets purchased and received on 29th March)
Shivani
(Learner)
(1881 Points)
Replied 07 October 2013
Samrendra Ji Please recheck my following entries taking into account what you said:
29-3-13
1) Advance Payment Entry
Advance to ABC 15000 (Current Asset)
To Cash/Bank 15000
2) Fixed Asset Entry
Case - 1
If bill received till 31-3-13, then on the date of receipt of bill
Computer 37200
To ABC 22200
To Advance to ABC 15000
Case - 2
If bill not received from ABC and goods also not received till 31-3-13, then no entry on 31-3-13
Case – 3
If bill not received from ABC till 31-3-13 but goods received on 29-3-13, then entry on 29-3-13
3) Payment Entry in April
Case 1
If bill was received till 31-3-13
ABC 22200
To Cash/Bank 22200
Case 2
If bill was not received from ABC and goods also not received till 31-3-13, then assuming that bill and goods received on 15-Apr, entry on 15-Apr will be
15-Apr
Computer 37200
To ABC 22200
To Advance to ABC 15000
Now Assuming that payment made on 20-Apr
20-Apr
ABC 22200
To Cash/Bank 22200
Case 3
If goods were received on 29-Mar but bill not received till 31-Mar, then assuming that bill received on 15-Apr, entry on 15-Apr will be
Provision for purchase 37200
To ABC 37200
Assuming payment made on 20-Apr
ABC 37200
To Advance to ABC 15000
To Bank 22200
I hope my entries are correcet.
Samrendra please suggest a better name than Provision for Purchase.
Kind of reads weird and also since we are purchasing computer which is a fixed asset, it cant be a purchase.
Shivani
Samrendra
(Asst. Manager- Internal audit)
(221 Points)
Replied 07 October 2013
Dear Shivani,
Seems good...... Look like recording is made on the basis of transfer of property instead of receipt of Invoice.
Name is not that relevant. You can put any other suitable name say Material/Fixed Assets receipt but not accounted
Ganeshbabu K
(Audit and Tax Advisory)
(48564 Points)
Replied 09 October 2013
1)Advance payment entry can be made in books for the amount paid
2)Fixed Asset can be capitalised if it is proved that ownership transfered to buyer and put to use before 31.03.2013
.
.
you should have deliver challan and a valid proof to say that asset was put to use before the date of invoice...
.
.
I prefer to capitalize on basis date of invoice....in order to avoid all confusion
Samrendra
(Asst. Manager- Internal audit)
(221 Points)
Replied 13 October 2013
Dear Ganeshbabu,
I believe Material Receipt Note is more authentic document than Invoice.
Ganeshbabu K
(Audit and Tax Advisory)
(48564 Points)
Replied 13 October 2013
Yes,,not possible to capitalize before mrn date
CAclubindia
