Share this content
0
420

Paying an invoice with services - accounting

Double entry for an invoice settled through provision of services not cash

My client is a micro entity whose main business is provision of services.

A supplier provided a good with a value of 150. The good was consumable, not inventory or a fixed asset.

Instead of cash payment, they asked for settlement with a free service worth 120.

If I make the following double entries: Dr Expenses 150, Cr Revenue 120 how should I account for the remaining 30?

 

Thanks!

Replies

Please login or register to join the discussion.

28th Nov 2018 21:55

How would you account for the entries if the supplier had paid cash for the service and your client had paid cash for the goods?

Thanks (0)
to Tim Vane
29th Nov 2018 19:53

If you did what you suggested, you'd end up £30 overdrawn, but in reality you aren't.

Paul's answer below is correct.

Thanks (0)
avatar
29th Nov 2018 09:11

Assuming that both supplier and client accept the deal is complete and no further amounts are due then either the supplier has given a £30 discount or your client has earned a premium of £30 (or I suppose a bit of both). I assume there is no VAT in question.

Thanks (1)
Share this content