Note on Journal Voucher for Advance Transactions

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Advance is an amount, which is given to official staff and other parties before receiving goods and services. It is given to perform a specific task. After the completion of such task, the advance amount should be cleared. Under new accounting system, the record of advance is made twice as follows:

Journal voucher at the time of giving advance

An advance is given to an official staff or to another party to make expenditure on the related budget head. When the advance is given the party receiving the advance with the related budget head is debited and Nepal Rastra Bank is credited. The journal voucher at the time of giving advance is passed as follows:

Dr. Name and post of the receiver

Advance for ……. (Budget head)

Cr. Nepal Rastra Bank

(Being advance given to Mr. …..for the purchase of ……)

Example:

Advance given to Section Officer, Ms. Sujata Raut for the purchase of vehicle of Rs. 1,00,000.

Code No.

Particulars

LF

BH No.

Debit Rs.

Credit Rs.

Dr. Section Officer, Ms. Sujata Raut

Advance for purchase of vehicle

29411

1,00,000

Cr. Nepal Rastra Bank

1,00,000

(Being advance given to SO Mrs. Sujata Raut for the purchase of vehicle)


Journal voucher at the time of clearing advance

The amount of advance, which is given to perform the specific task, should be cleared after its completion. It is cleared after the submission of necessary bills and documents. The amount of expenditure may be equal to the advance, less than the advance or more than the advance amount. The following are the five conditions to clear the advance:

  1. When the amount of expenditure is equal to the advance
    When the amount of bill of expenditure remains equal to the amount of advance given, the following journal voucher is passed for clearing the advance:
    Dr. B.E. Name of the Budget Head
    Cr. The Name and Post of the person
    Clearance of advance for.......
    (Being advance for ...... cleared)

    Example:

    Section Officer, Ms. Sujata Raut, submitted the bill of the vehicle for Rs. 1,00,000 and her advance was cleared.

    Code No.

    Particulars

    LF

    BH No.

    Debit Rs.

    Credit Rs.

    Dr. BE Vehicle

    1,00,000

    Cr. Section Officer, Ms. Sujata Raut

    Advance for purchase of vehicle cleared

    29411

    1,00,000

    (Being advance given to SO Ms. Sujata Raut for the purchase of vehicle)

  2. When the amount of expenditure is more than the advance
    If the amount of expenditure is more than the advance given, the excess amount of expenditure is paid through cheque. The following journal voucher is passed for clearing the advance:
    Dr. B.E. Name of the Budget Head
    Cr. The Name and Post of the person
    Clearance of advance for.......
    Cr. Nepal Rastra Bank
    (Being advance for ...... cleared by issuing a cheque for excess amount of expenditure)
    Example:

    Section Officer, Ms. Sujata Raut, submitted the bill of the vehicle for Rs. 1,20,000 and her advance of Rs. 1,00,000 was cleared.

    Code No.

    Particulars

    LF

    BH No.

    Debit Rs.

    Credit Rs.

    Dr. BE Vehicle

    29411

    1,20,000

    Cr. Section Officer, Ms. Sujata Raut

    Advance for purchase of vehicle cleared

    1,00,000

    Cr. NRB

    20,000

    (Being advance given to SO Ms. Sujata Raut for the purchase of vehicle)

    When the amount of expenditure is less than the advance
    If the amount of expenditure is less than the advance given, the surplus amount is returned to concerned office or deposited in the bank. The following journal voucher is passed for clearing the advance:
    Dr. B.E. Name of the Budget Head
    Dr. Nepal Rastra Bank
    Cr. The Name and Post of the person
    Clearance of advance for.......
    (Being advance for ...... cleared and surplus amount is returned)
    Example:

    Section Officer, Ms. Sujata Raut, submitted the bill of the vehicle for Rs. 75,000 and her advance of Rs. 1,00,000 was cleared.

    Code No.

    Particulars

    LF

    BH No.

    Debit Rs.

    Credit Rs.

    Dr. BE Vehicle

    29411

    75,000

    Dr. Nepal Rastra Bank

    25,000

    Cr. Section Officer, Ms. Sujata Raut

    1,00,000

    Advance for purchase of vehicle cleared

    (Being advance given to SO Ms. Sujata Raut for the purchase of vehicle)

    When the whole amount of the advance is returned
    Sometimes, the party may fail to perform the assigned job. In such condition, the whole amount of advance should be returned to the office. The following journal voucher is passed for clearing the advance:
    Dr. Nepal Rastra Bank
    Cr. The Name and Post of the person
    Clearance of advance for.......
    (Being advance for ...... cleared by returning the amount of advance)
    Example:

    Section Officer, Ms. Sujata Raut, made no expenditure so her whole amount of advance was deposited into the bank and her advance of Rs. 1,00,000 was cleared.

    Code No.

    Particulars

    LF

    BH No.

    Debit Rs.

    Credit Rs.

    Dr. Nepal Rastra Bank

    1,00,000

    Cr. Section Officer, Ms. Sujata Raut

    Advance for purchase of vehicle cleared

    1,00,000

    (Being advance given to SO Ms. Sujata Raut for the purchase of vehicle)

    When the partial clearance is made
    Sometimes, the party who has taken the advance may clear the advance partially. The following journal voucher is passed for clearing the advance:
    Dr. B.E. Name of the Budget Head
    Cr. The Name and Post of the person
    Clearance of advance for.......
    (Being advance for ...... cleared partially)
    Example:

    Section Officer, Ms. Sujata Raut, submitted bill of Rs. 70,000 a partial clearance of her advance.

    Code No.

    Particulars

    LF

    BH No.

    Debit Rs.

    Credit Rs.

    Dr. BE Vehicle

    29411

    70,000

    Cr. Section Officer, Ms. Sujata Raut

    Advance for purchase of vehicle cleared

    70,000

    (Being advance given to SO Mrs. Sujata Raut for the purchase of vehicle)

  • Advance is an amount, which is given to official staff and other parties before receiving goods and services.
  • An advance is given to an official staff or to other party to make expenditure on the related budget head. 
  • The amount of advance, which is given to perform the specific task, should be cleared after its completion. 
  • If the amount of expenditure is less than the advance given, the surplus amount is returned to concerned office or deposited in the bank. 
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Very Short Questions

An advance is given to an official staff or to other party to make expenditure on the related budget head. When the advance is given the party receiving the advance with related budget head is debited and Nepal Rastra Bank is credited. The journal voucher at the time of giving advance is passed as follows:

Dr. Name and post of the receiver

Advance for ……. (Budget head)

Cr. Nepal Rastra Bank

(Being advance given to Mr. …..for the purchase of ……)

The amount of advance, which is given to perform the specific task, should be cleared after its completion. It is cleared after the submission of necessary bills and documents. The amount of expenditure may be equal to the advance, less than the advance or more than the advance amount. The following are the five conditions to clear the advance:

When the amount of expenditure is equal to the advance given

When the amount of expenditure is more than the advance given

When the amount of expenditure is less than the advance given

When the whole amount of advance is returned

When the partial clearance is made.

Code No.

Particulars

LF

BH No.

Debit Rs.

Credit Rs.

Dr. Storekeeper Mr. Shankar Sharma

Advance for office furniture purchase

29311

10,000

Cr. Nepal Rastra Bank

10,000

(Being advance given to storekeeper Mr. Shankar Sharma for the purchase of office furniture through cheque no. 00037.)

Code No.

Particulars

LF

BH No.

Debit Rs.

Credit Rs.

Dr. BE Office furniture

29311

10,000

Cr. Store keeper Mr. Shankar Sharma

Clearance of the advance for the purchase of office furniture

10,000

(Being advance of Mr. Shankar Sharma for the purchase of office furniture cleared.)

Code No.

Particulars

LF

BH No.

Debit Rs.

Credit Rs.

Dr. Petty cash fund

3,000

Cr. Nepal Rastra Bank

3,000

(Being cheque issued to create petty cash fund and handed it over to accountant Shyam Raut.)

Code No.

Particulars

LF

BH No.

Debit Rs.

Credit Rs.

Dr. Section Officer Sarita Puri

6,000

Cr. Nepal Rastra Bank

6,000

(Being advance given to section officer Sarita Puri through cheque no. 006789.)

Code No.

Particulars

LF

BH No.

Debit Rs.

Credit Rs.

Dr. Storekeeper K. Pradhan

Advance for purchase of office furniture

29311

1,20,000

Cr. Nepal Rastra Bank

1,20,000

(Being advance given to storekeeper K. Pradhan for the purchase of office furniture.)

Code No.

Particulars

LF

BH No.

Debit Rs.

Credit Rs.

Dr. BE Office Furniture

29311

1,25,000

Cr. Storekeeper K. Pradhan

Clearance of advance for the purchase of office furniture

1,20,000

Cr. Nepal Rastra Bank

5,000

(Being advance for the purchase of furniture cleared.)

Code No.

Particulars

LF

BH No.

Debit Rs.

Credit Rs.

Dr. Accountant Prem Shrestha

Advance for the purchase of computer

29511

35,000

Cr. Nepal Rastra Bank

35,000

(Being advance given to Prem Shrestha for the purchase of computer.)

Code No.

Particulars

LF

BH No.

Debit Rs.

Credit Rs.

Dr. BE Computer

29511

35,000

Cr. Accountant Prem Shrestha

Clearance of advance for the purchase of computer

35,000

(Being advance cleared by Accountant Prem Shrestha for the purchase of computer.)

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  • Advance is an amount, which is given to official staff and other parties before receiving goods and services.

    Patent


    Advance


    Loan


    Dividend


  • When the advance is given ______.

    the party receiving the advance with another budget head is debited and the party giving the advance is credited


    the party giving the advance with related budget head is debited and Nepal Rastra Bank is credited


    Nepal Rastra Bank is debited and the party receiving the advance with related budget head is credited


    the party receiving the advance with related budget head is debited and Nepal Rastra Bank is credited


  • The amount of advance, which is given for performing the specific task, should be ______.

    cleared after its completion
    should not be cleared
    cleared during its completion
    cleared before its completion
  • If the amount of expenditure is more than the advance given, the excess amount of expenditure is paid through ______.

    money transfer


    cash


    none of the options are correct


    cheque


  • The amount of expenditure ______.

    less than the advance
    more than the advance amount
    all the options are correct
    may be equal to the advance
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Sujan

Mrs.sujata cleared TADA advance submitting the bill voucher of 1000 against the advance given of Rs.10000.


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