Journal entry

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 November 2013 Sir I receive the bill from security service Bill value-20000/-,& ST 25% 618/-,Total Bill Amount-20618/-,75% ST We have to pay so how can i pass the journal entry,entry passed below method is this correct r not? kindly guide me....

(75% Value of 20000/-)
(Indirect Exp)Service Tax 12% Dr-1800
(Indirect Exp)Edu Cess 2% Dr - 36
(Indirect Exp)sec Edu Cess 1%Dr - 18
To(Lia Ac)Service Tax Payable 12% -1800
To(Lia Ac)Edu Cess payable 2% - 36
To(Lia Ac)Sec Edu Cess Payable 1% - 18

Payment Entry
Service Tax payable Ac
Bank

Annu Agarwal

Annu Agarwal (Expert)

10 November 2013 The entry done is correct.But it is advisible that instead of debiting service tax you the debit the expense account itself.

Querist : Anonymous

Querist : Anonymous (Querist)

12 November 2013 Thanks for your reply.if i debit the actual expenses account,the original amount will be reduced

Annu Agarwal

Annu Agarwal (Expert)

12 November 2013 Sir
How can debiting the expense account can lead to reduction in the original amount .Please explain.May be I need to correct myself.

Querist : Anonymous

Querist : Anonymous (Querist)

13 November 2013 If deduct st actual exp a/c means
Security Charges a/c dr 20618
to party ac 20618

Journal Entry for service tax
Service tax a/c dr 1854
to security charges ac 1854

so security charges expenses ledger balance will be reduced rs.18764

it think it may be wrong r right u just clarify with any expert iam a beginner thats y...