accounting entries for expenses...

A/c entries 1648 views 2 replies

Vishwa

CA Job

87 Points Joined March 2007

Hi friends ,

Querry:

Incurred expenses of Rs206758/- on 01.10.2007 for three years.Rs 38417 (for 6 months) for current years and Rs 192083 (01.04.2008 to 30.09.2010) for next years. TDS dedt Rs 23742(10.30% on Rs 206758)

Journal entry passed :

expenses dr 38417 ; prepatd expenses dr 192083 and credited party Rs 206758 and credited tds on expenses Rs 23742

But the payment made by issuing 30 post dated chqs of Rs 6891.95 ( net of TDS / 30 months ).So 6 chqs total Rs 41351.70 ( for 1.10.08 to 31.03.2008 ) debited to our bank account till 31.03.2008. Remaining chques issued are with the party.

Pls send the journal entry at the end for the same?Please tell me the whether it is a outstanding / prepaid expenses as on 31.03.2008?Extract of Balance sheet on 31.03.2008.

Replies (2)

C.A. M.Com. Suhas A. Nagpure

1175 Points Joined March 2008

As per my knowledge there is no need to post separate entry at the end of the year as you already pass the entry i.e.

Expenses A/c Dr 38417

Prepaid Exp. Dr. 192083

To Party A/c 206758

To TDS 23742

As we are following the accounting assumption accruals so the above entry is correct & there is no need to pass separate entry at the end of year. Regarding the Cr. Balance of party it will be nil after 30 postdated chqs. We are not concern with what we are paying to party in current year. (It will consider when the books are maintained on cash basis system.)

If am wrong please correct it……………..