Dear Friends
M Working in a service providing company,
1. We have booked service Invoice of 1,20,000 on 1/4/2013
2. We received 1,20,000.00 on 10/5/2013
3. The Serive is for the period of 1/4/2013 to 31/3/2014
How to pass the month end entris, please help me out, Your reply is highly appreciated.
Thanks and Regards
Chandru.
Following are the entries to be passed :-
Trade Receivable / Customer A/c Dr. 120000
To Income from service A/c 106800
To Service Tax Collected A/c 13200
( Being Invoice for service provided booked )
Bank A/c Dr. 120000
To Trade Receivable / Customer A/c 120000
( Being payment received from customer )
Regards,
Devendra Kulkarni
accordignly, for the particular month as per adopted method whatever extra sale you booked you have to reverse it by -
sale a/c dr XXXX
sale in advance (current liab) Cr XXXX
your party account will not have any impact of your monthly closer entries. so it will get NIL when you receives payment in the month of May.
ACCOUNTING ENTRYIES AS PER DEVENDRA ARE CORRECT, SO NOW SERVICE TAX DEPOSIT ENTRIES ARE REQUIRED WHICH LAST DATE IS 5TH OF EVERY NEXT MONTH IF YOU ARE I COMPANY ASSESSEE.
SERVICE TAX COLLECTED A/C DR.
TO BANK/ CASH
(BEING SERVICE TAX DEPOSIT THROUGH CASH/BANK)
AGREED WITH DEVENDRA'S ANSWER...
I think ....
Entries suggested by Devendra are already booked by Chandrashekhar.
Now his query is , How that entire booked sale will reflect in monthly closed financial statements?
I.e the entire sale is not for the one month for which he wants to closed the books.So it should be shown?
Para 7.1 of AS-9 states that, Revenue from service transactions is usually recognised as the service is performed , either by the proportionate completion method or by the completed service contract method.
Thus at the time of raising the invoices you cannot take the entire amount as your service income rather you should recognise it only on the proportionate basis.
At the time of invoice booking
Customer A/c Dr 1,20,000
To Deferred Income A/c (Liability) 1,06,800
To Service tax payable A/c 13,200
Month End closure entry
Deferred Income A/c (Liability) Dr 8,900 (1,06,800/12)
To Service Income A/c Cr 8,900
At the time of ST payable
Service tax A/c Dr 13,200
To Bank A/c 13,200
At the time of receipt of cash
Bank A/c Dr 1,20,000
To Customer A/c 1,20,000
CAclubindia
