Deepak (Assistant Manager) (115 Points)
26 September 2013Hi..
There are 3 companies company A, B and C, A and B are in India and C in UK. These companies are group concern.
Company A provide the services to C, C transfer the half payment to company B, and B transfer that payment to A.
Here how can we do transaction entries in the books of Company A and B ?
Samrendra
(Asst. Manager- Internal audit)
(221 Points)
Replied 29 September 2013
Journal Entries in the Book of A.
C A/c Dr. xxxx
To Revenue xxxx
(being services provided to C)
Cash / Bank A/c Dr. xxxx
To B xxxx
(being amount received from B)
B A/c Dr. xxxx
To C xxxx
(being payment made by B on behalf of C)
In Book of B
Cash / Bank A/c Dr. xxxx
To C xxxx
(being Cash receipt from C)
C A/c Dr. xxxx
To A xxxx
(being on behalf payment made by C now transferred to A)
Samrendra
(Asst. Manager- Internal audit)
(221 Points)
Replied 29 September 2013
Shivani
(Learner)
(1881 Points)
Replied 03 October 2013
Samrendra Sir
Entries in Books of C
1) Expense
To A
2) B
To Cash
3) A
To B
Am I right Sir?
Regards
Samrendra
(Asst. Manager- Internal audit)
(221 Points)
Replied 04 October 2013
CA LOVELY ARORA
(C.A. B.Com (H) Graduate)
(2151 Points)
Replied 06 October 2013
Dear samrendra sir and shivani mam,
how all you came to the entry, for example,
B A/c Dr... XXX
To A A/c....... XXX
in books of C???
and same in case of books of A and B, though they are group concerns, but why and how can one company is concerned with the entry effect in other books.. for e.g. A made a payment to B and told him to give half of the amount to C from it... then in books of A, the entry would be just B Dr.... To Cash/Bank... how and why will A concerned with making half of payment further to C by B????
Rectify me, if i am wrong.. and sorry, i was concentrated on this entry only.. actually, i didn't read the whole query and response.. but kindly, tell me should such entry come in books of other group concern??
Samrendra
(Asst. Manager- Internal audit)
(221 Points)
Replied 07 October 2013
Dear Lovely,
This entry arises because of instruction received to B from C to pay half of his outstanding to A
therefore its transfer of outstanding from A to B in books of C
A A/c Dr... XXX
To B A/c....... XXX
in books of C???
sree
(Finance Professional)
(44 Points)
Replied 12 October 2013
Good morning,
On the Same note :: I have a Question, Since Company A and B are in India, can they maintain Same Bank Account but 2 different Books for Transaction entries?
Please suggest me.
Samrendra
(Asst. Manager- Internal audit)
(221 Points)
Replied 12 October 2013
Shivani
(Learner)
(1881 Points)
Replied 31 October 2013
Dear Samrendra and Lovely Sir
When C is making payment to B and B in turn making payment to A, then does it imply that C must be owing some amount to B and A must be owing some amount to B, before the transaction between A and C took place?
Please do reply.
I am getting confused.
I felt that for e.g. in books of A after receiving amount from B, A had to give B back that amount but since B is making payment on behalf of C, A set off the two account by passing following entry
B
To C
Shivani
Samrendra
(Asst. Manager- Internal audit)
(221 Points)
Replied 03 November 2013
Prachi Bansal
(3129 Points)
Replied 04 April 2021
Can someone explain me the treatment of VAT in an inter company transaction?
CAclubindia
