dear Sir,
Some Sundry creditor's balances is show in Dr. because we have given to advance for goods purchase.so it's mandatory to pass the below entry in books of accounts
Advance ABC company Dr.( advance to Supplier's- assest)
ABC Comapny Cr. 31.03.2022
ABC company Dr.
Advance ABC company cr. 01.04.22
or nothing to do leave as it's Kindly suggest.
mandatory entries should be as follows .
Advance paid to Creditors ABC company on 31/3/22 .
Advance ABC & Co A/c Dr ( Asset ) 5000
To Bank A/c Cr 5000
( Advance payment to ABC company)
On 31/3/22 Advance ABC company A/c will be carried forward to next year.to 1/4/22.
When you receive Invoice pass entry
Purchase A/c Dr 10000
To ABC company A/c Cr 10000
( Booking of an expense)
When you make balance payment
ABC company A/c Dr 10000
To Advance ABC company A/c Cr 5000
To Bank A/c Cr 5000
( payment made after adjustments)
CAclubindia
