Accounting treatment

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Anand Singh Bisht (Querist)
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26 August 2013 Hello Everyone

Greeting
Good Evening !!!!

I have to ask an accounting entry ??

So my question is that
we have a client whose tax paid by us. The client is Bangalore based Company.And i had transfer the amount to there an employee who is working for our organisation. So he had paid the amount of tax through his account. so what is the accounting treatment for that. we had paid them VAT and Professional Tax through online payment by bank. Can anybody help me on this matter.

Ganeshbabu K

Ganeshbabu K (Expert)
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26 August 2013 Dr.Vat payable/PT payable A/c
Cr.bankA/c

Anand Singh Bisht

Anand Singh Bisht (Querist)
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26 August 2013 But Sir we have to claim the reimbursement also so the complete entry what in my point of view will be

In Debit Note

1. Party A/c Dr.
To, Rates & Taxes A/c

(for Reimbursement claim)

2. Rates & Taxes A/c Dr.
To, Bank A/c
(Tax paid)

3. Bank A/c Dr.
To, Party A/c
(when party return us payment)

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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26 August 2013 Mr.Anand Singh i agree with your entries but there is a small mistake

So i required some clarification for payment of taxes you first transferring the funds into your employee's account, but in your entries you didn't make any entry for transferring of funds into your employee's account.

So as per my view the following entries are appropriate and effects all your transactions.

1) Employee's a/c dr
To Bank a/c
(At the time of amount transferred)
2) Rates and taxes a/c dr
To Employee's a/c
(at the time of passing of above entry)
3) Party a/c dr
To Rates and taxes a/c
(at the time of passing of above two entries)
4) Bank a/c dr
To Party a/c
(at the time of amount received from party).

OM SAI SRI SAI JAI JAI SAI

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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26 August 2013 For giving more clarification and understanding i suggested you the above entries otherwise instead of above entries you can pass the following entries

1) Employee's a/c dr
To bank a/c
(at the time of transfer of amount)
2) Party a/c dr
To Employee's a/c
(at the time of passing of above entry)
3) Bank a/c dr
To Party a/c
(at the time of receipt of amount)

Instead of first said entries you can also pass the above entries and in narration you clearly indicate the details regarding purpose of funds transferred and creating of liability etc..

If you want i also can suggest you regarding of writing of narration.

OM SAI SRI SAI JAI JAI SAI

Anand Singh Bisht

Anand Singh Bisht (Querist)
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27 August 2013 Thanks you Mr. Dintakurthi Tirumala
I hope you are doing well !

I appreciate your great clarification regarding this matter and i am very glad to get your response.

Thank you so much .......

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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27 August 2013 With regards and pleasure.

OM SAI SRI SAI JAI JAI SAI

Anand Singh Bisht

Anand Singh Bisht (Querist)
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27 August 2013 OM SAI SRI SAI JAI JAI SAI.

JAI SAI RAM

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