Accounting entries of tod unpaid

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Divya Agarwal (Querist)
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29 April 2014 Dear Experts,
what are the accounting entries for the TOD unpaid closing entries and next year's opening entries. with its impact on P&L A/c.

thanks in advance

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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29 April 2014 Temporary Over Draft is the bank balance, it need to show under Bank borrowings. If you donot want to show the TOD in the balance sheet, the you can provide then cheque in the year and and show the bank reconciliation item. the same will be cleared in the next financial year. Only interest on TOD will impact in the p&l

Divya Agarwal

Divya Agarwal (Querist)
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30 April 2014 By TOD I meant turnover Discount sir

C.A. Mayur J. Raiyani

C.A. Mayur J. Raiyani (Expert)
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30 April 2014 (1) From Accounting Aspect :
you need to create provision for TOD amount payable.
Year end entry :
Exp A/c Dr
To Provision for TOD(F.Y.____)

Year beginning:
Debit Provision for TOD account when you pay to your dealer etc.

A world of caution for Income Tax :
Ensure that your Provision for TOD account gets nil within 1-2 year, as this is short term liability. And any balance which is not payable should be reversed.

(2) From auditor aspect :
Basis of provision should be clear and unambiguous. Auditor should clarify management judgments and estimates on arriving basis for provision.

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Divya Agarwal

Divya Agarwal (Querist)
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30 April 2014 thanks Mayur for help

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