WHAT JOURNAL ENTRY TO PASS AND ALSO LET ME KNOW THE RESPECTIVE HEAD OF ACCOUNT
1 ) FOR ISSUE OF BG TO GOVERNMENT DEPARTMENT
2) AFTER EXPIRY OF BG ITS CANCELLED AND THE AMOUNT IS CREDITED BACK TO OUR ACCOUNT
5 Replies
Rama chary Rachakonda
(Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294)
(5661 Points)
Replied 18 November 2024
Here are the journal entries and respective heads of account for the two scenarios:
sayad
(Executive)
(206 Points)
Replied 18 November 2024
Dear Rama Ji
Very Well Explained Thank you so much for your response
sayad
(Executive)
(206 Points)
Replied 19 November 2024
Sir
for cancellation you said to crdit bank account but one doubt in our firm if we credit bank account its means we are reducing bank balance usally when amount is received in bank we debit bank account little confusion need help
Rama chary Rachakonda
(Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294)
(5661 Points)
Replied 19 November 2024
Please Read carefully again my answer
Ayush
(Executive )
(6765 Points)
Replied 21 November 2024
Bank Guarantee Margin Account...........Dr
To Bank Guarantee Issued Account...........Cr
Summary:
The margin amount is blocked by the bank (treated as an Current Assets).
The BG issued is recorded as a Current Liability, representing the commitment made.
Bank Guarantee Issued Account...........Dr
To Bank Account...........Cr
Summary:
The BG liability is canceled, reducing the outstanding commitment.
The refunded margin is credited back to the bank account.
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