How should an advance report be submitted correctly?
An employee took money from the till and made purchases. How to fill in the report, which receipts to keep and how to return unspent money.
Sardor, an office manager, took 1 000 000 soums from the till for paper, a printer cartridge and tea. This money is not yet his; it belongs to the company. That is why after the purchases he submits an advance report.
What is attached to the advance report?
- A receipt or invoice for each purchase
- For services, an acceptance certificate
- A list of the items purchased and their amounts
What journal entries are made?
| Transaction | Debit | Credit | Amount |
|---|---|---|---|
| Advance issued to Sardor | 4230 | 5010 | 1 000 000 |
| Paper and cartridge (materials) | 1010 | 4230 | 650 000 |
| Tea for the office (administrative expense) | 9420 | 4230 | 230 000 |
| Unspent money returned to the till | 5010 | 4230 | 120 000 |
The advance was issued for general business needs, so sub-account 4230 "Advances for general business expenses" is used: the NAS No. 21 table shows cash advances issued to accountable persons as Dt 4220-4290 Ct 5010.
At the end, the balance of account 4230 for Sardor drops to zero.
Which mistakes are common?
- A receipt is lost: such an expense is hard to approve without a document
- Unspent money is not returned and "rolls over" into the next advance
- The report is submitted late: set the deadline clearly in the accounting policy
Test yourself
5 questions on this topic: pick an option or reveal the answer.
The foreman of the factory's repair workshop (auxiliary production) spent more than the advance he received for spare parts and submitted an expense report. What journal entry records the company's debt to the foreman?
A procurement officer of "Qiziltepa tekstil" LLC received an advance of 4,200,000 soums for a business trip. The expense report confirmed spending of 3,650,000 soums; the remainder was not returned to the cash desk, and it was decided to withhold it from wages. How is the deduction recorded?
In the shop of "Muborak savdo" LLC (a trading organisation), refrigerated display cases worth 54,000,000 soums are used; the accounting policy sets the straight-line method and a life of 72 months, and there is no residual value. How is monthly depreciation shown?
"Dehqonobod sement" LLC leased its idle warehouse to another organisation under an operating lease. The warehouse's initial cost is 216,000,000 soums; the accounting policy sets the straight-line method and a useful life of 240 months, and there is no residual value. How is monthly depreciation recorded at the lessor?
The retail company "Qorasuv market" bought software for the checkouts in its sales floor for 36 000 000 soum and recognized it as an intangible asset in account 0430. The accounting policy sets the straight-line method and a useful life of 36 months, with no residual value. How is the monthly amortization recorded?
Answered: 0 / 50 of 5 correct
All tests →See also
Sources
- NAS No. 21 "Chart of Accounts" · accounts 4230, 5010, 9420, 1010; table of settlements with accountable persons (4220-4290)
- Example · prepared by the author, illustrative