Hi guys, I have looked though similar topics but i could not apply those situations/methods to my scenario.
This is my case:
- I purchased goods from a supplier
- they invoiced me for 100,000
- however, the actual amount was supposed to be 90,000.
- i issued a postdated cheque for 90,000
- the supplier then issued me with a credit note for 10,000
- as far as our accounting is concerned, i have to record everything as it comes, so the purchase invoice has to be recorded as it is (value of 100,000), my payment as 90,000 and the credit note as 10,000.
both the purchase invoice and cheque payments have been recorded without any issue. I don’t know how to record the credit note of 10,000 without creating a credit/debit imbalance in another account.
What i’ve tried:
- journal entry, credit accounts payable (invoice), debit “supplier credits” a/c. (outcome is that the purchase invoice is still outstanding that amount)
- journal entry: debit accounts payable (invoice), “credit supplier” credits a/c. (outcome is that the purchase invoice balances out, but creates a credit amount under the supplier, which is also inaccurate)
- journal entry: debit accounts payable (invoice), credit “supplier overpayment” (expense) a/c. (outcome is that the purchase invoice balances out, but creates an amount due (negative amount) in supplier overpayment a/c, which is also inaccurate)
My last resort is to adjust the original purchase invoice to amount to 90,000 (as it should have been) and attach all the physical paperwork for the file with a note to state how i got to 90,000.
apologies for the long query, but i’d rather be as detailed as possible.