There may not be a separate account in which to store advances, especially if employee advances are infrequent; possible asset accounts in which to store this information are: Journal entry for income received in advance is; Income A/C. Show journal entries for office rent paid by cheque in the books of XYZ Ltd. March 10 Journal entry for office rent paid by cheque, March 31 Journal entry for transfer of rent expense to the income statement (profit and loss account), Related Topic Journal Entry for Advance Received from Customer. A journal entry is when you make a record of a transaction that happens in connection with your personal or business accounts. It must also be noted that Advance to Suppliers is only recorded as a Current Asset if the order delivery date is less than 12 months. Invoicing mistakes that most Startups make. The journal entry to record this transaction is as follows. Whatis the Journal entry for advance payments and advance - ALLInterview The advance payment needs to be qualified. Replied What should be a journal entry for 'advance received against sales'? Advance payments may include: Paying for a magazine subscription / streaming service for the full year rather than paying by the month. For example, you would create an account called "Smith Metal Technology.". On the other hand, a cash account is treated as a current asset. When the amount is paid back by the employee at the end of the month, or as per the mutual agreement of the employee and the company, the amount of the cash advance is credited from the asset account used while issuing the advance until the balance for the advance is null. Manage Settings The best approach to handling employee advances is to prohibit them without the permission of senior management. {"smallUrl":"https:\/\/www.wikihow.com\/images\/thumb\/8\/83\/Account-for-Advance-Payments-Step-1.jpg\/v4-460px-Account-for-Advance-Payments-Step-1.jpg","bigUrl":"\/images\/thumb\/8\/83\/Account-for-Advance-Payments-Step-1.jpg\/aid1420320-v4-728px-Account-for-Advance-Payments-Step-1.jpg","smallWidth":460,"smallHeight":345,"bigWidth":728,"bigHeight":546,"licensing":"