Accounting entries
This query is : Resolved
08 February 2012
Dear Sir
please advice treatment of Sales tax(CST,VAT)Excise duty in P&L and balance sheet.Generally this has treated : CST&VAT collected on sales adjusted with Input VAT(Purchase) and balance if any being deposited and same treatment with Excise.
In Balance sheet only net sales(excluding CST&VAT)taken. please suggest about Excise and confirm above please.
Shivanand
please advice treatment of Sales tax(CST,VAT)Excise duty in P&L and balance sheet.Generally this has treated : CST&VAT collected on sales adjusted with Input VAT(Purchase) and balance if any being deposited and same treatment with Excise.
In Balance sheet only net sales(excluding CST&VAT)taken. please suggest about Excise and confirm above please.
Shivanand
09 February 2012
Hi,
VAT paid on purchase can be classified under Purchase in Profit and Loss Account.
VAT collected on sale can be classified under Sales in the Profit and Loss account.
Net Difference if it is refund, it will appear in the current assets of Balance sheet and if it is payable, it will appear under current liabilities of Balance sheet.
in the above case, VAT paid during the year will also debited to Profit and Loss account.
It is the same case with Central Excise also.
VAT paid on purchase can be classified under Purchase in Profit and Loss Account.
VAT collected on sale can be classified under Sales in the Profit and Loss account.
Net Difference if it is refund, it will appear in the current assets of Balance sheet and if it is payable, it will appear under current liabilities of Balance sheet.
in the above case, VAT paid during the year will also debited to Profit and Loss account.
It is the same case with Central Excise also.
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