Cash Advances

[Former Member]

Good Morning Experts,

Can anyone tell me how to handle advances. For instance an employee has advances of 5000. His liquidation is 3600 and return of cash in excess of liquidation is 1400.

Questions are:

How to record

cash advance of 5000

Liquidation of 3600 (to deduct in his Cash advance and record expense)

Return of cash of 1400

Thanks.

[former_member583013]

Sandra,

As you might probably know recording accounting entries would depend on how a company wants to see these transactions in their accounting books and report them.

One way would be to...

Cash Advance is an Outgoing Payment but since it is returnable, it is an Asset entry.

So if you have an Asset account in your CoA for Cash Advances, then

Create an Outgoing Payment (Banking > Outgoing Payments > Outgoing Payment)

Select Account

Enter your Cash Advance GL in your lines and Add

The GL entries would be

Cash Advance A/C  Dr...............5000
Bank A/C Cr.............................5000

For the liquidation, create a Journal entry / AP Invoice as the procedure may be

JE would be

Expense A/C  Dr...............3600
Cash Advance A/C  Cr....................3600

If using AP Invoice, the AP Invoice can be create on this expense account

For the returned 1400

Create Incoming Payment, and select Account. Select the Cash Advances GL in the line

The GL entries would be

Bank Dr...............1400
Cash Advance A/C Cr.............1400

Regards

Suda

[former_member187989]

hi,

Do cash payment for 5000,create service ap invoice for 3600,manually reconcile it return cash 1400 to respective g/l account.

Hope it will works.

Jeyakanthan

[Former Member]

This is purely an accounting question. You have more options to book it. The simplest way would be by JE.

Thanks,

Gordon