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Journal entry

trideep (ca) (218 Points)

17 September 2019

AIR CONDITIONER shopkeeper uses AC for his own shop from his own stock of AC. what will be the journal entry

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16 Replies

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 17 September 2019

First debit AC Account and credit supplier

Then debit supplier and credit bank

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Sandeep Sharma (Accounts executive) (552 Points)
Replied 17 September 2019

When transaction done..

Drawing A/c Dr.
To Inventory (AC) A/c Cr.

As on 31 March

Capital A/c Dr.
To Drawing A/c Cr.

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 17 September 2019

Dear you are not using it for house purpose, but using it in office, so Drawings account cannot be used

1 Like

Kumar Sushank (General Manager - Finance) (1040 Points)
Replied 17 September 2019

I am assuming that purchase entry has been done, So In the given case. Entry would be

A/C (Under Fixed Assets) ................. Dr.

AC Purchase..................................... Cr.

If you are using that AC from your stock.

2 Like

RAJA P M ("Do the Right Thing...!!!") (127921 Points)
Replied 17 September 2019

Originally posted by : Kumar Sushank
	I am assuming that purchase entry has been done, So In the given case. Entry would be A/C (Under Fixed Assets) ................. Dr. AC Purchase..................................... Cr. If you are using that AC from your stock.

YES.... I FULLY AGREED.

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Chirag Tandon (24 Points)
Replied 17 September 2019

Fixed Asset A/C Dr.
To Inventory A/C

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sabyasachi mukherjee (27117 Points)
Replied 17 September 2019

Fixed Asset dr.
cr. Inventory.
In house entry.

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Sandeep Sharma (Accounts executive) (552 Points)
Replied 17 September 2019

Sorry in that Case, Entry passed by Sushank sir is absolutely correct.

sabyasachi mukherjee (27117 Points)
Replied 17 September 2019

Do you know this is called captive consumption.
the moment cr. / dr. purchase account
purchase ledger gets affected.
its better to cr. inventory.

RAJA P M ("Do the Right Thing...!!!") (127921 Points)
Replied 17 September 2019

The purchase entry posted if in purchase leger then it will be reverse from purchase head only...

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sabyasachi mukherjee (27117 Points)
Replied 17 September 2019

Not a correct disclosure in financial statement.

1 Like

Sandeep Sharma (Accounts executive) (552 Points)
Replied 17 September 2019

No journal entry will take place in this scenario. However, you will need not to show the sale of that one AC which you installed in your shop. That one AC you will treat as fixed asset and charge depreciation on this.