CA Ashik Ali (Chartered Accountant) (97 Points)
26 December 2011hi frens. i ve a small doubt in acc entries. Actually there are 2 branches for which accounts are maintained seperately in tally.
Sale of diff prod made from both the companies to a single client. and in return the client gave a single reciept for both the amounts in the name of first branch. how to account for it?
Sumit Grover
(Chartered Accountant )
(3652 Points)
Replied 26 December 2011
At the time of sale
Debtor A/c Dr.
To Sales A/c
At the time of receipt of cash by 2nd branch
Branch 2nd A/c Dr.
To Debtor A/c
And when the amount is realised from branch 2nd
Bank A/c Dr.
To Branch 2nd A/c
Plz correct me if m wrng.
CA SANKET AGGARWAL
(Professional Consultant)
(139 Points)
Replied 26 December 2011
Assume sale is of50 by First Branch and80 by Second
At the Time of Sale
First Branch
Client A/c Dr 50
to Sales 50
Second Branch
Client A/c Dr. 80
To Sales 80
At time of Reciept
By First Branch
Bank A/c Dr 130
To Client 130
Client A/c Dr 80
to Branch 2 80
Branch 2 A/c Dr. 80
To Bank 80
By Second Branch
Branch 2 Dr. 80
To Client A/c 80
Bank A/c Dr. 80
To Branch 2 80
i think this is the way to Pass the Entries for the Situation so that all Account can be closed.
CA Ashik Ali
(Chartered Accountant)
(97 Points)
Replied 27 December 2011
thank u Mr. sumit and Mr. sanket
shivam gupta
(Student)
(142 Points)
Replied 27 December 2011
Dear Sanket Sir
Your entry of receipt by the first Branch is not corrcect Although the effect will be nullified becoz of 1 wrong entry is nullified by another entry
Your entry of realisation by first branch is
Bank A/c Dr 130
To Client 130
& your subsequent entry is
Client A/c Dr. 80
To Branch 80
the correct entry would be
Bank A/c Dr 130
To Client 50
To Branch 80
you will be thinking that there will be no difference if u passed your way of entries & i passed my way of entries but i would like to tell u that yours entry is wrong because ;-
At the time of Realisation u had written off the amount of the client by Rs. 130 however out of 130 , 80 Rs. of client is Belongs to Branch 2
So u cannot wrie off the full amount of client by Rs. 130 U should write off the amount of client which was related with 1st branch i.e 50 Rs. & for the rest Branch 2 will be credited ( Branch 2 will become creditor of branch 1)
& your next Entry is just like an rectification Entry
Client of Rs. 80 had been wrongly deducted & also u missed to create the liability of 2nd branch (because of these items are related with B/s no P/l account will come in between)
Hence your entry was
Client a/c Dr. 80
To Branch 2 80
I hope u have understood what i was talking about thank u
CA SANKET AGGARWAL
(Professional Consultant)
(139 Points)
Replied 27 December 2011
Dear Shivam,
We are not passing entry in our notebook...This is a practical way to pass the entries.
When you pass a single entry instead of 2 entries in practical then they will lead to confusions.
I will try to Explain you..
Bank A/c Dr. 130
To Client 50
To Branch2 80
Showing that we recieved the money in bank from Client Rs. 50 and from Branch2 Rs. 80 but which is not true and just the wrong picture due to 2 merged entries.
may be i am wrong but i never believe in merged entries as they create confusions.
shivam gupta
(Student)
(142 Points)
Replied 27 December 2011
Dear Sanket Sir
Sir in ur entry, u had written off the client a/c by130 which is not correct let me show u
Suppose there is only one Client in branch 1 a/c
U sold goods to that client & passed an entry by. 50 in client A/c
But at the time of receipt if u credited ur client A/c by130 it means u will have to pay 80to u Debtor
however that Debtor of80 doesnt belongs from ur branch
so as a transaction we can only pass my mentioned entry
if accountant pass ur way of entries then debtor will go negative
And sir as u said that u dont beleive in merged entries
so i am going to pass unmerged entries
Bank a/c Dr 50
To Client A/c 50
Bank A/c Dr. 80
To Branch 2 80
arpit
(student)
(159 Points)
Replied 27 December 2011
sumit ji sorry to contradict you but in the question whole amount is received by 1st branch so 2nd branch should pass the following entry:
Branch 1 A/c Dr.
To Debtors
Bank A/c Dr.
To Branch 1 A/c
Anvesh Desai
(Chartered Accountant)
(156 Points)
Replied 27 December 2011
Agree with shivam gupta...you are absolutely correct..
CAclubindia
