Journal Entries and subsequent posting in Ledger

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APARESH GHOSH (Querist)
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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

Shudhanshu Agrawal

Shudhanshu Agrawal (Expert)
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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

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