Accounting effect of Prov. of Excise duty on Finished goods

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surinder kumar (Querist)
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03 February 2009 It is stated that as per ICAI guidance notes, Exise duty provision is made on Finished goods having no effect on the profit & loss account, Is it true? what entries to be passed while making the provision of excise duty on FG. Please reply.

Jitender

Jitender (Expert)
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03 February 2009 provision is to be made on finished goods lying in stock .

excise duty dr
to provision for excise duty.

surinder kumar

surinder kumar (Querist)
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04 February 2009 1. Excise Duty will be debited as expense
2. credited as liability.
3. And also added to the FG value.

There will be not effect on Profit & loss account by the above entry, only this will provide the presentation of that and show the liability of excise duty on company,

As per AS-2 This is the requirement to make the provision of Excise duty on FG.

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