Accounting Entry for deferment of sales tax
This query is : Resolved
12 September 2009
dear sirs ,
Plz suggest me the accounting treatment of defferment of sales tax , since there is a opening balance of DFT SALES TAX IN Balance sheet & in current year , concern has paid the tax out of it , how to adjust the balance ? if expensed in P&L , WHAT IS THE ENTRY ?
Plz suggest me the accounting treatment of defferment of sales tax , since there is a opening balance of DFT SALES TAX IN Balance sheet & in current year , concern has paid the tax out of it , how to adjust the balance ? if expensed in P&L , WHAT IS THE ENTRY ?
30 September 2009
if company has opted composition scheme then it will be an expenses in profit and loss account otherwise it would be only a discharge of liability and after payment only that laibility willl be removed from balance sheet.
the entry would be in first case:-
sales tax Dr.
to cash
Profit and loss a/c Dr.
to sales tax
as sales tax has been paid then defferd sales tax will get reduced.
in second case the entry would be:-
deffered sales tax a/c Dr.
to cash
as above again deffered sales tax will get reduced.
the entry would be in first case:-
sales tax Dr.
to cash
Profit and loss a/c Dr.
to sales tax
as sales tax has been paid then defferd sales tax will get reduced.
in second case the entry would be:-
deffered sales tax a/c Dr.
to cash
as above again deffered sales tax will get reduced.
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