Debit Note and Credit Note Entry

A/c entries 2630 views 3 replies

Ravishankar K

Accountant

461 Points Joined March 2011

Dear Friends we have a branch account and have received some work (forms processing) which had to be done by them but we did the processing, but as the DD was recd in their name they deposited the DD in their name and we need to collect the amount from them,, .. This income has service tax constraint.

So i plan to make entry as follows: CREDIT NOTE ENTRY

Form processing fees (current asset group) ac Dr..... 10000

Branch Account (Branch accounts group) ac Cr----- 10000

BANK RECEIPT ENTRY

after receiving the payment from the branch booking will be done as

form processing (income group) ac ---- Cr - 9000

service tax (dont bother the % its example) Cr - 1000

Branch Account (branch account head) Cr -- 10000

Form processing fees (current asset group) ac Dr - 10000

Bank Account (Savings Bank Ac) ac Dr - 10000

kindly advise if the above entry is correct or not ...

REgards,

Ravi.

Replies (3)

Harpreet

* * * * * *

1670 Points Joined March 2008

You are recorded/booked incorrect entries in the books of accounts as per me. As per me entries are as follows:

If you have finalize the bill and want to book income then.

1. Form Processing Fee A/c Cr 9000/-

Service Tax Payable A/c Cr 1000/-

Branch A/c or Customer A/c Dr 10000/-

After that when you will get the money then

Branch A/c Cr 10000/-

Bank or Cash A/c Dr 10000/-

Note : As per new rule/amendment of Service Tax, the same is to be paid on booked/accural basis now. Not collection basis right now from 01-04-2011.

Ravishankar K

Accountant

461 Points Joined March 2011

THanks a lot for the guidance will consult this with my auditor, senior officials because till date all our offices do like this, same with starting of courses, also.

Ravishankar K

Accountant

461 Points Joined March 2011

Hi its me once again my senior accounts officer has asked the circular or notification which mentions to collect service tax on accrual basis. so please give me ;)