naroo (accountant) (184 Points)
13 November 2010hi frndz
pl clear my doubt regarding below transaction.
Mr. A running Abc co. whose bus is to selling antique item in abroad thru internet. he sell to Mr. M worth of 10,000.
now Mr. A got money directly in his account while the money should have been credited in ABC Co. a/c.
now pl tell me entry in A ( receiveing and transferring ) and ABC Co.'s Books ( receiving and recording sales ).
pl help
Karthik
(student)
(147 Points)
Replied 13 November 2010
it can be treated as if cash has been recieved by ABC co and Mr A has withdrawn the cash. .
Entries..
Cash A/c Dr 10,000
To Sales 10,000
A's Drawings a/c Dr 10,000
To Cash 10,000
Waiting for other views..
Yogesh Shah
(Managing Corporate Finance)
(1051 Points)
Replied 13 November 2010
Hi Naroo,
From your question it seems that it is proprietorship business. In my opinion, in proprietorship, it doesn’t make any difference that in whose account money is received because both are one and the same.
In respect of accounting query, I would say that as antique items are sold through internet, hence payment from customer must be after delivery means at the time of delivery.
If inventory records are also maintained, then pass following entry at the time when antique items are delivered :- Customer Account Debit to (Particular / Specific) Antique Item Account. When payment is received then reverse Customer Account, and pass following entry :-
Cash / Bank Account Debit
to Customer Account.
IF inventory records are not maintained then pass the entry only after payment is received i.e. –
Sales Account Debit
to Customer Account.
Whatever I have given is what I think and my assumption about system of concerned ABC & Co. If my assumptions are wrong then tell accordingly. And other members, kindly rectify me if my answer is wrong.
Vivek Gaur
(CA Final)
(346 Points)
Replied 13 November 2010
@ Yogesh
Payment in proprietor's a/c & payment in prop. business a/c, these are not same even in prop business... otherwise there is no point in making capital a/c in prop business.
Karthik is right..if A has received payment on behalf of ABC n haven't deposited to ABC's a/c, it will be treated as capital withdrawal.
If money is deposited into ABC's a/c by A, it will be simple sales entry:
Bank Dr.
To Sales
Yogesh Shah
(Managing Corporate Finance)
(1051 Points)
Replied 13 November 2010
Hi Vivek,
Forget about what Theory says. I was speaking about practically what happens.
Take an example of ITR filing. You never file two separate ITRs for proprietor and his proprietorship. I suggested aforesaid entries only to keep the things as simple as possible and to avoid a mess. I have seen many many cases where both are considered one and same.
Karthik
(student)
(147 Points)
Replied 13 November 2010
| Originally posted by : Yogesh Shah | ||
 |
Hi Vivek, Forget about what Theory says. I was speaking about practically what happens. Take an example of ITR filing. You never file two separate ITRs for proprietor and his proprietorship. I suggested aforesaid entries only to keep the things as simple as possible and to avoid a mess. I have seen many many cases where both are considered one and same. |
 |
By following ur logic, one can charge his household expenses to his business P & L... C'mon man that is not possible..
Samarth Mehta
(none)
(59 Points)
Replied 13 November 2010
In a’s books:
M Dr
To bank/ abc co
In abc co’s books:
Bank/
To m
sumit kandoi
(CA FINAL)
(351 Points)
Replied 15 November 2010
in his personal file
CASH ACOOUNT dr
TO ABC & CO A/C
In his ABC a/c
Capital A/c or A a/c Dr
To Sales A/c
NO more entry required
Ratti Wahal
(Company Secretary)
(139 Points)
Replied 15 November 2010
in the books of accounts of ABC Co.
M A/c Dr. xxxxxxxxx
To Sales xxxxxxxxx
cash A/c Dr. xxxxxxxx
To Mr. A 's A/c xxxxxxxx
Mr. A's A/c xxxxxxxx
To Mr. M xxxxxxxx
In the books of Mr. A
Bank A/c Dr. xxxxxxx
To M xxxxxxx
Abc Co. Dr. xxxxxxx
To Cash xxxxxxx
akash singh
(accounts officer)
(26 Points)
Replied 20 December 2010
The entry Should be :-
1} In Books Of ABC Co.
Mr. M A/c Dr. 10000
To Sales A/C Cr. 10000
2} Mr. A A/c Or Dr. 10000/-
To Mr M A/c Cr. 10000/-
( Due To Amount Wrongly Deposited by mr. M in Mr A's Account )
3.} Cash / Bank A/c Dr. 10000/-
To Mr. A A/c Cr. 10000/-
( Amount Rcd . From Mr . A As Advance Recovery)
In Books of Mr. A
1} Bank A/c Dr. 10000/-
To Mr. M A/c Cr. 10000/-
2} Mr. M A/c Dr. 10000/-
To ABC Co. Ltd Cr. 10000/-
( Amount Rcd On Behalf of ABC Co. From Mr M ) ( Concider as Advance Received from ABC Ltd .)
3) ABC Co. Ltd. A/c Dr. 10000/-
To Cash / Bank Cr. 10000/-
( Repayment of advance)
CAclubindia
