Journal Entries and subsequent posting in Ledger
This query is : Resolved
APARESH GHOSH
(Querist)
27 July 2010
Accounting Treatment of Reimbursable Expenses with suitable examples
Accounting treatment of Service Tax in case of Service Provider supported with Journal Entries and subsequent posting in the Ledger
Please mention also whether the above items will be P& L /Balance Sheet items
Accounting treatment of Service Tax in case of Service Provider supported with Journal Entries and subsequent posting in the Ledger
Please mention also whether the above items will be P& L /Balance Sheet items
Shudhanshu Agrawal
(Expert)
27 July 2010
Suppose there is a reimbursment of Mobile expenses then entry will be
Mobile Reimbursment A/c Dr
To Cash/bank A/c
Suppose in the same example there is a service tax credit which is available then entry shall be
Mobile Reimbursment A/c Dr
Service Tax Input A/c Dr
To cash/bank A/c
Reimbursment A/c is expense account so it will be in P & L A/c. Service tax input a/c is a current asset. So it shall be in Balance Sheet.
However if service tax is paid then entry will be
Service tax output A/c Dr
To cash/bank A/c
In this service tax output is a current liabilities
Mobile Reimbursment A/c Dr
To Cash/bank A/c
Suppose in the same example there is a service tax credit which is available then entry shall be
Mobile Reimbursment A/c Dr
Service Tax Input A/c Dr
To cash/bank A/c
Reimbursment A/c is expense account so it will be in P & L A/c. Service tax input a/c is a current asset. So it shall be in Balance Sheet.
However if service tax is paid then entry will be
Service tax output A/c Dr
To cash/bank A/c
In this service tax output is a current liabilities
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