Page 261 - Account 10

While Clearing Advance Under Different Conditions

i. When clearance is made by returning the whole amount, not being spent,
Dr. Cash/Treasury Single Account (TSA)
Cr. Person clearance of advance for ................ (budget head)

Thus, it is posted once in debit side of bank A/c and next in the clearance column of
advance expenditure A/c, in budget expenditure, it is recorded in the brackets. But it
should be remembered that if the amount is debited in cash A/c instead of debiting in
bank A/c directly, then that should be again posted in debit side of bank A/c and credit
side of cash A/c by assuming the cash is immediately deposited into bank.
ii. When clearance is made by spending all the amount of advance exactly,
Dr. B.E .................. (budget head)
Cr. Person clearance of advance for ...............(budget head)
The posting is made, once in the debit side of budget expenditure A/c (openly, without
bracket), then in the clearance column of advance expenditure A/c and again in the Cr.
side of budget expenditure A/c (inside bracket) to cancel the earlier mentioned amount
of expenditure.
iii. When clearance is made by spending more than the amount of advance,
Dr. B.E ................. (budget head)
Cr. Person clearance of advance for ...............(budget head)
Cr. Treasury Single Account (TSA)

Example,
When advance given to Ramesh the Section Officer is Rs. 3,000 for Travelling and the
expenditure incurred is Rs. 3,500.
Then, the entry is:
Dr. B.E. Travelling Expenses 22612 3,500
Cr. S.O. Ramesh clearance of advance for Travelling Expenses 3,000
Cr. Treasury Single Account (TSA)
Thus, the posting is made once on in the debit of budget expenditure column A/c Rs.
3,500 i.e. without bracket and then in the credit of budget expenditure A/c i.e. inside
bracket Rs. 3,000 to cancel the earlier mentioned expenditure or Rs. 3,000 and lastly Rs.
3,000 in the clearance column of advance A/c and 500 in the credit column of bank A/c.
iv. When the clearance is made by spending less than the amount of advance and
returning the surplus amount in the office,
Dr. BE ..................... (budget head)
Dr. Cash/Treasury Single Account (TSA)
Cr. Person clearance of advance for ................ (budget head)

For Example,
Advance given to Section Officer Ramesh Rs. 3,000 on travelling expenses and the
expenditure incurred Rs. 2,600.

260 Aakar’s Office Practice and Accountancy - 10 Bank Cash Book 261