Purchases enrty

This query is : Resolved

Divya Agarwal (Querist)
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06 May 2014 Experts,
The entry of Purchases is:
purchases dr.100
to creditor 100

AT the Time of Payment:
Creditor a/c dr.100
to bank a/c 90
to Tds A/c 10

Is this entry is also correct:
Purchases dr.100
to creditor 90
to tds payable 10

at the time of payment

Creditor a/c dr. 90
to bank a/c 90

Please explain which entry is appropriate as both gives same impact OR any other reasons.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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06 May 2014 first u explain on purchase how u pay tds as tds is paid mostly on servcies?

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Nikhil Kaushik

Nikhil Kaushik (Expert)
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06 May 2014 assuming that TDS is applicable, the second entry more effective as TDS is payable on earlier of credit to client or payment.

CA Umesh kumar Mantri

CA Umesh kumar Mantri (Expert)
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06 May 2014 Secon entry is more Correct and alternatively u can do second entry as like this:

Purchase A/C Dr. 100
Creditors A/c Dr (TDS Amount) 10
To Creditors A/c 100
To TDS Payable 10

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Divya Agarwal

Divya Agarwal (Querist)
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06 May 2014 Actually it was a service as client has classified it as purchases (service = Input services ) , so I just put purchase instead of service provider.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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06 May 2014 both the above person have given correct ans as 2nd is correct entry.

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Nikhil Kaushik

Nikhil Kaushik (Expert)
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06 May 2014 go for the second entry. and deposit tDS accordingly.

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