PANKAJ AGARWALA (Asst. Manager (Finance & Accounts)) (38 Points)
23 June 2014Hi, I have some issues on presentation of few items in final accounts.
Whether debit and credit of a same party can be set off in the following cases:
1)Advance given to X Rs. 100 against a Purchase Order; but invoice came for Rs. 70 for another Purchase Order.
2)Debit balance(Rs.100) appearing in Advance for Capital Goods but credit balance(Rs. 120) appearing in Creditors for Raw Materials
3)Advance given Rs. 150 for a work; work done but invoice not yet come, so provision taken for Rs. 150.
V P Narasimhan
(Accounts Manager)
(791 Points)
Replied 25 June 2014
Dear
Normally in final accounts there should not be any debit balance in Creditors' account and there should not be any Credit balance in Debtors' accounts. Entries to be modified and treated as advance/provisions accordng to the nature of accounts.
CAclubindia
