How do we consider closing stock in works contract entity. Especially they did work & bills sumbitted to department,but the payament will relase next financial year. Mainly we considering the turnover on form 16A which given by the department for the financial year.Pending bills they will not include in form 16A because payment were not made on that. whether its correct.& remaining bills sumbitted we consider as closing stock. but books are maintaing under mercantile system. kindly advice me whether we have to declare pending bills to be turn over for that year.
10 December 2011
The accounting practice followed by you is not in accordance with Mercantile System of accounting. All bills raised during the financial year under consideration , whether payment against them has been received or not , will be considered while calculating total turnover of the company. The pending bills will be added back to calculate total turnover of the company.
15 December 2011
If the bills were issued before end of year but not recorded in books being not received during the year. But contractee has shown the bill amount in hios account and now issued the TDS under Income Tax and WCT (VAT) Act, how to consider the turnover of sale in audit.
CAclubindia
