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Discussion > Accounts > A/c entries >

Journal Entry while making Year End Provision

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Management Trainee

[ Scorecard : 909]
Posted On 20 May 2010 at 20:07 Report Abuse

Please clarify me what entry should be passed in case of Provision for Audit Fees(consider TDS also) and entry for subsequent year.


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shushantsinghal
BCOM(HONS),C.A

[ Scorecard : 264]
Posted On 20 May 2010 at 20:24

TAX AUDIT FEES  A/C DR.....(EXPENSE)

  TO ABC & CO. A/C CR....(CURRENT LIABILITY)

  TO TDS PAYABLE  A/C CR.....(DUTIES & TAXES)





shushantsinghal
BCOM(HONS),C.A

[ Scorecard : 264]
Posted On 20 May 2010 at 20:26

NEXT YEAR.....

TDS PAYABLE A/C DR....

   TO BANK /CASH A/C

 

ABC & CO  A/C DR....

  TO  BANK/CASH A/C......




Somaas Kandan
CA Final

[ Scorecard : 301]
Posted On 23 May 2010 at 08:40

Provision Entry will be

        Audit Fees A/c Dr   xxxx

               To Audit Fees Payable A/c   xxxx

               To Tds Payable A/c               xxxx

Next Year the entry Should be reversed.

Audit Fees payable A/c Dr      xxxxx

Tds payable A/c              Dr     xxxxx

     To Bank A/c                                   xxxxx




CMA.Baskar.V
Cost Accountant

[ Scorecard : 348]
Posted On 23 May 2010 at 18:09

Dear Sommas,


Once TDS deducted in current year, we can not reverse the same in next year. According to Income tax act, TDS has to deduct from Vendor Account, at time of accouting of bill or at time of payment whichever is earlier.

Dear Jasmeet,

Current year to make provision, entry will be

Debit - Audit Expeses A/c

Credit - Provision for Expenses \ Audit Expeses Payable A/c

In next year, after invocie receipt from vendor

Debit - Provision for Expenses \ Audit Expenses Payable A/c

Credit - TDS Account

Credit - Vendor Account  / Creditors Account

 

I hope above clear your dobut

 

 




Member (Account Deleted)
ALWAYS READY TO LEARN NEW THINGS

[ Scorecard : 10481]
Posted On 09 June 2010 at 20:19

Originally posted by : CMA.Baskar.V

Dear Sommas,


Once TDS deducted in current year, we can not reverse the same in next year. According to Income tax act, TDS has to deduct from Vendor Account, at time of accouting of bill or at time of payment whichever is earlier.

Dear Jasmeet,

Current year to make provision, entry will be

Debit - Audit Expeses A/c


Credit - Provision for Expenses \ Audit Expeses Payable A/c


In next year, after invocie receipt from vendor

Debit - Provision for Expenses \ Audit Expenses Payable A/c


Credit - TDS Account


Credit - Vendor Account  / Creditors Account


 

I hope above clear your dobut

 

 

 best answer




Shrilakshmi Raj
CA

[ Scorecard : 77]
Posted On 10 June 2010 at 17:10

Dear Baskar,

Does that mean, TDS Payable will not appear in Current Year?

Only the expense will be taken to Provision for exp.?

 




CA. jalpesh vaghela
B.COM, A.C.A

[ Scorecard : 69]
Posted On 11 June 2010 at 15:33

FOLLOW THE BASKAR




Harshil Akhani
article

[ Scorecard : 22]
Posted On 25 September 2011 at 23:58

Dear Bhaskar,


While thanking you for sharing your views, i somehow do not agree with your entries. As per TDS provision, TDS should be deducted when expense is booked (provision is also considered as booking of exp) or whenver paid, whichever is earlier. Hence TDS entry will come in current year.
Entries given by Sushant Singal is correct.


Regards,

Harshil




Ms Manvinder Kaur Kalra
Partner

[ Scorecard : 25]
Posted On 02 March 2012 at 19:32

Golden Rule is to understand the basis of provision created at year end. If basis is regular payments to a known party or Purchase order raised, than tds is deductable at the time of provision only that is before 31/3 even if vendor bill is not received by the deductor. If basis is ad hoc and party to be credited is clearly not known, than no tds is deductable at the time of provision of expense.

And in case of auditor, in case of companies, usually auditors for the next period are fixed in the relevent financial year only, so its remuneration is also very clear at the time of provision, so tds is deductable at the time of provision of audit fee.



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