Retention at Suppliers

Code: 2146
👁 Views: 42

Account Information

Account Type Statement of Financial Position
Normal Balance Debit

Definition

Amounts withheld from supplier payments as performance guarantee

Common Journal Entries

Retain portion of supplier payment

Dr. Purchases
Cr. Accounts Payable
Cr. Retention at Suppliers

Release retention to supplier

Dr. Retention at Suppliers
Cr. Bank Account

Deduct penalty from retention

Dr. Retention at Suppliers
Cr. Penalty Income

Write off retention of insolvent supplier

Dr. Bad Debt Expense
Cr. Retention at Suppliers

Retain portion of supplier payment

Dr. Purchases
Cr. Accounts Payable
Cr. Retention at Suppliers

Release retention to supplier

Dr. Retention at Suppliers
Cr. Bank Account

Deduct penalty from retention

Dr. Retention at Suppliers
Cr. Penalty Income

Write off retention of insolvent supplier

Dr. Bad Debt Expense
Cr. Retention at Suppliers