Book entry for amount deducted as penality
This query is : Resolved
Neetal Jain
(Querist)
10 October 2009
Hi..
This is Neetal.
Plz help me
A company has deducted amount as penality for not performing duty well from a secutiry company bill
My question is how that amount which is deducted as penality should be treated or pass a entry in the books..
This is Neetal.
Plz help me
A company has deducted amount as penality for not performing duty well from a secutiry company bill
My question is how that amount which is deducted as penality should be treated or pass a entry in the books..
11 October 2009
1) A Co ltd Dr 1000/-
To security charges 1000/-
(Being bill no.....dated....
raised towards security service
charges)
2) Penalty Dr 250/-
To A Co Ltd 250/-
(Being penalty deducted by
latter against bill no...
dated.....)
3) Bank Dr 750/-
To A Co Ltd 750/-
Being cheque received against
bill no.... dated..... towards
full settelement)
To security charges 1000/-
(Being bill no.....dated....
raised towards security service
charges)
2) Penalty Dr 250/-
To A Co Ltd 250/-
(Being penalty deducted by
latter against bill no...
dated.....)
3) Bank Dr 750/-
To A Co Ltd 750/-
Being cheque received against
bill no.... dated..... towards
full settelement)
Deepak Goel
(Expert)
11 October 2009
Very correct exmple
Neetal Jain
(Querist)
13 October 2009
Thanks for the reply......
But where the A/c head penalty will be shown in books.As an income or accrued income??i.e. in P&L a/c or in B/S??
Plz reply
But where the A/c head penalty will be shown in books.As an income or accrued income??i.e. in P&L a/c or in B/S??
Plz reply
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