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Clear my Doubts

Srabani Banerjee (Accountant) (35 Points)

28 April 2023

What will be the entry, when

1. Patient deposit money to path lab for some test?

2. That path lab is running as franchise basis.collect Rs.100 from patient & give main lab Rs.58 for test, how to account for?

Thanks in advance

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3 Replies

Yasaswi Gomes new (Finance ) (4514 Points)
Replied 29 April 2023

It's sorta agent commission principle relationship.

Path lab will debit bank and credit sales

Bank Dr. 42

Sales cr. 42

And the rest is transferred to lab. If you want to record it then

Bank Dr. 100

Sales cr. 42

Bank Cr. 58

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Bharat Kumar (6 Points)
Replied 29 April 2023

When a path lab running on a franchise basis collects Rs. 100 from a patient and gives the main lab Rs. 58 for the test, the following entry will be passed:

Cash/Bank A/c/Accounts receivable Dr. Rs.100

To Franchise Commission Received A/c Rs.42

To Main Lab A/c Rs.58

Yasaswi Gomes new (Finance ) (4514 Points)
Replied 29 April 2023

Accounts receivables? Ok your fine here. But in general accounting terms it's creditors or payables. Indas rule! In reporting we don't put up creditors and debtors names.