ACCOUNTING TREATMENT OF BID SECURITY


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Hi can anyone tell me what's the accounting treatment of bid security received from suppliers? and treatment when the bid security id forfeited?
 
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Joined
Oct 2, 2021
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Singapore
When bid security is received

Dr Cash at Bank
Cr Security Deposit Liability (a liability since it is not your money but owed to and must eventually be refunded to the suppliers)

When bid security is forfeited

Dr Security Deposit Liability
Cr Income in Profit & Loss
 
Joined
Jan 7, 2022
Messages
9
Reaction score
0
Country
Pakistan
When bid security is received

Dr Cash at Bank
Cr Security Deposit Liability (a liability since it is not your money but owed to and must eventually be refunded to the suppliers)

When bid security is forfeited

Dr Security Deposit Liability
Cr Income in Profit & Loss
Thanks a lot
 
Joined
Oct 2, 2021
Messages
57
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9
Country
Singapore
Please tell me about the treatment when security deposit is in the form of Call Deposit Receipt/security deposit receipt
I do not understand what is Call Deposit Receipt/Security Deposit Receipt

Is this when the vendor provides you with a receipt or letter as a Security Bond to claim from the Bank in the event of default by the vendor? If so, there is no accounting entries to record in the books since no cash has exchanged.
 
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Joined
Jan 7, 2022
Messages
9
Reaction score
0
Country
Pakistan
I do not understand what is Call Deposit Receipt/Security Deposit Receipt

Is this when the vendor provides you with a receipt or letter as a Security Bond to claim from the Bank in the event of default by the vendor? If so, there is no accounting entries to record in the books since no cash has exchanged.
Thanks a lot..
 
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