Anybody expert are here

I have a qurery regarding Audit Fee provision entry.

i made this entry dated on 31/03/2012

1) Audit Fee  Dr (Exp)  Rs. 84270 (75000+ST 12.36%)

    To Audit Fee payable (Provision) Rs 75843

    To TDS Payable Rr 8427

Please expert only

It's correct.

Thank for reply

yes entry is correct.

It will be better if anyone explain it in detail

the total Audit Fee including ST is the expense incurred by the co, hence the gross amount is charged to P&L.

Now out of this total amt, as TDS is applicable on it 10% of it will go the govt & remaining 90% will be paid to the Auditor.

So while taking the same to the B/s 10% will be shown as TDS payable & remaining 90% will be shown as o/s to the Auditor's laibility A/c whihc whill be paid in the subsesquent year..

I AGREE WITH GIRIDHAR :)

I think instead of booking entire amount as Audit Fee, its better to recognise Audit Fee and Service Tax separately, so as to ensure better disclosure

suggested entry is

Audit Fee (Professional Charges) A/c dr

Service Tax (Rates & Taxes / Duties & Taxes)

    To Audit Fee Payable A/c

    To Tds Payable

In this scenario also, entire amount is booked as expense i P& L A/c, but under different groupings

Hi,

Firstly you need to identify weather you can avail Service Tax or not. There would be 2 cases

CASE 1 :  Where you can avail Service Tax

Audit Fee (Expense) A/c Dr

Service Tax Available Provision (Asset A/c)  Dr

    To Audit Fee Payable (Liability) A/c

    To Tds Payable 194J (prof/tech) (Liabilty) A/c

CASE 2 :  Where you can not  avail Service Tax

Audit Fee (Expense) A/c Dr

Service Tax (Rates & Taxes  Expenses A/c)  Dr

    To Audit Fee Payable (Liability) A/c

    To Tds Payable 194J (prof/tech) (Liabilty) A/c

For  any further assistance pls feel free to cantact

thanks jai

for a better and deeper explanation