Inter Company transactions accounting
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
06 June 2011
Can anyone clarify the following inter company transaction:
Suppose if I want to allocate salary & other cost between 2 companies, which account should i debit/Credit with regard to expenditure part.
If I debit/Credit salary account, then PF ,ESI Contribition does not match in the P & L account. Same is the case with TDS related accounts. I would have paid TDS from one company and later on when I allocate and transfer the expenses to other company then the TDS on Gross amount in P & L does not match.
OR, is there any other head under which such inter company expenses can be absorbed.
Suppose if I want to allocate salary & other cost between 2 companies, which account should i debit/Credit with regard to expenditure part.
If I debit/Credit salary account, then PF ,ESI Contribition does not match in the P & L account. Same is the case with TDS related accounts. I would have paid TDS from one company and later on when I allocate and transfer the expenses to other company then the TDS on Gross amount in P & L does not match.
OR, is there any other head under which such inter company expenses can be absorbed.
CA Pushpendra Gaur
(Expert)
10 October 2011
Well in case of allocation of salary or other expense to other company
Debit the name of the company on whose behalf payment is made or particular expenses is allocated
Debit the name of the company on whose behalf payment is made or particular expenses is allocated
CA Pushpendra Gaur
(Expert)
10 October 2011
Well if at the time of payment of the salary or other expenses, the expenses or salary account was debited
then while transferring the same expenses A/c must be credited
then while transferring the same expenses A/c must be credited
CA Pushpendra Gaur
(Expert)
10 October 2011
Well when u r transferring the Salary to another company, then particular PF, ESI Contribution should also be transferred to another site corresponding to the salary expenses transferred
CA Pushpendra Gaur
(Expert)
10 October 2011
If the following entry was passed at the time of payment of salary or expenses
Salary A/c DR
TO Employee PF Contri A/C
To Employee ESI contri A/c
To Bank A/c
Expenses A/c DR
To TDS Payable A/c
To Bank A/c
Salary A/c DR
TO Employee PF Contri A/C
To Employee ESI contri A/c
To Bank A/c
Expenses A/c DR
To TDS Payable A/c
To Bank A/c
CA Pushpendra Gaur
(Expert)
10 October 2011
The entry to be passed for the transfer should be
Other Company Name A/c DR
To Salary A/c
Other Company Name A/c DR
To Expenses A/c
(The above entries to be passed with full amount of salary or expenses)
Other Company Name A/c DR
To Salary A/c
Other Company Name A/c DR
To Expenses A/c
(The above entries to be passed with full amount of salary or expenses)
CA Pushpendra Gaur
(Expert)
10 October 2011
Now look you may be having doubt relating to TDS, PF and ESI Contri
Look brother, All of the above a/cs are of personal nature and mere liability a/c they are not expenses a/c,
when u talk about the employer's contribution of PF and ESI
The proportionate amount of the employer's contribution should also be transferred to the Other Company
Look brother, All of the above a/cs are of personal nature and mere liability a/c they are not expenses a/c,
when u talk about the employer's contribution of PF and ESI
The proportionate amount of the employer's contribution should also be transferred to the Other Company
CA Pushpendra Gaur
(Expert)
10 October 2011
The entry for the above transaction will be
Other Company A/c DR
To Employer's PF Contri
To Employer's ESI Contri A/c
the above entry to be passed with the proportionate amount of salary transferred
In case of TDS please make manual tds renciliation by reducing the amount of TDS paid on other behalf from total TDS
don't trace the amount dirrectly from the books same with case of PF & ESI
Other Company A/c DR
To Employer's PF Contri
To Employer's ESI Contri A/c
the above entry to be passed with the proportionate amount of salary transferred
In case of TDS please make manual tds renciliation by reducing the amount of TDS paid on other behalf from total TDS
don't trace the amount dirrectly from the books same with case of PF & ESI
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Accounting treatment of AMC alongwith the purchase of Laptop
- Condonation Request sec 119(2) b -Enhancement Limit of Leave Exemption prior to AY 2023
- Unable to File TDS Q2 Return – New TRACES Portal Error
- Transfer of Physical Stock Between Two Proprietorship Concerns
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- Taxation of crypto futures in India Fy 2026- 2027
- Issuing of delivery challan by seller of goods
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- EPF ECR NEW RULES Sep 17th 2026
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
