29 September 2016
Kindly tell me which of the following method of passing journal entry is correct and also tell the reason.
1st method)
at the time of due
Dr Commission on sales A/c 1000
Cr. A's Commission A/c. 950
Cr. Tds A/c. 50
at the time of payment
Dr. A's commission a/c. 950
Dr. Tds a/c. 50
Cr. Bank A/c. 1000
2nd Method
at the time of due
Dr commission a/c. 1000
cr. A's commission a/c. 1000
at payment time
Dr A's commission a/c. 1000
cr cash. A/c. 950
cr. Tds A/c. 50
29 September 2016
If you want to keep the books of accounts as per Income Tax Act, then 1st option is followed....with a small exception For commission due debit commission 1000 credit A 1000 ------------------------ on the same day debit A 50 credit TDS 50 for tds due to be deducted ----------------------------------------- at the time of payment of tds within due date as specified in the income tax act debit tds 50 credit 50 ------------------------------------------------ at the time of payment to A debit A 950 credit bank 950 ---------------------------- please note if interest is paid on TDS, the same has to be accounted for accordingly.
CAclubindia
