Purchasing Goods from Ajay and Settling Accounts

Explanation:

When purchasing goods from a supplier, it is important to keep track of the amount owed and make payments in a timely manner. In this scenario, Ajay is the supplier and the buyer owes him ₹4000 for the goods received. However, the buyer is settling the account with a payment of ₹3800. Here are the details of the transaction:

Step 1: Purchase Goods from Ajay

The buyer purchases goods from Ajay and owes him ₹4000.

Step 2: Payment of ₹3800

The buyer makes a payment of ₹3800 to Ajay in settlement of the account. This payment is less than the total amount owed, but it is an acceptable arrangement if both parties agree to it.

Step 3: Record the Transaction

It is important to record the transaction in the books of accounts. The following entries should be made:

- Debit Purchase Account with ₹4000
- Credit Accounts Payable with ₹4000
- Debit Accounts Payable with ₹3800
- Credit Cash/Bank Account with ₹3800

Conclusion:

When purchasing goods from a supplier, it is important to keep accurate records of the transaction and make payments in a timely manner. If there is a discrepancy in the amount owed, it is important to communicate with the supplier and come to a mutually agreeable solution. By doing so, both parties can maintain a good business relationship and avoid any misunderstandings in the future.