Journal entries

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Advance paid to party on behalf of company by a outsider now company is paying amount to outsider and amount should be taken from party.

 

What will be the journal entry

Replies (4)

If Party is A.... Outside Party is B...

As per your query Payment made to Mr B as

Dr. Mr. B - XXXX

Cr. Bank - XXXX

It will journal to Mr. A as

Dr. Mr. A - XXXX

Cr. Mr. B - XXXX

 

Note : As per above query we will post the Entries. But, As per my view it's not good or Advisable...

In the books of company:

1. when a party X paying advance money to Party Y on behalf of company

Party Y A/c          Dr.

      To Party X

2. when company is paying money to party X

   Party X              Dr.

      To Bank     

Is Journal entries print out important?

Lets  say  1)  Company  = A        2)  Outsider = B      3)  Party =C  (  sundry creditors ) 

All  the  entries  in the  books  of  company  A  

 

1)  1st  J. E  will  be  Advance  to   C  

      Advance  to Mr  C   A/c                 Dr 

      To  MR B                                       Cr 

(  Being  advance paid  by  Mr B  to  party  on behalf  of  our Company ) 

 

2)   Same advance paid by  B  return to  him so entry  will be 

      MR  B                    A/c                   Dr 

      To Bank                 A/c                   Cr 

(  Being advance paid  by  B  return  to him ) 

 

3)  When you received  Invoice form party C ( sundry creditors ) 

      Adjustment  entry 

     Mr  C                                   A/c                 Dr 

     Advance  to  Mr   C          A/c                   Cr 

(  Being  Advance  payment  adjusted  after  receipt  of  Invoice   )   

     


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