FBT

Sirs'

Please explain me about.

1. FBT paid- whether it is an expenses or current asset?

2.In my company every quarter we paid the FBT. But we made entries like

FBT A/c    Dr     Rs.100

to FBT payable (07-08)  Rs. 100

and at the time of payment

FBT paid (07-08)  Rs. 100

To Bank                                  Rs. 100

Here FBT under the group of Indirect Expenses.

FBT payable (07-08) under the group of Statutory Liabilities

FBT Paid (07-08) under the group of Current Assets.

What is the reason behind it.

Because we can make it like

FBT payable(07-08)  A/c Dr.  Rs. 100

To Bank                                                       Rs.100.

please explain.

Replies (3)

See FBT Paid is our Current Assets .Because it is an advance payment made to the Govt.

1. FBT is a type of direct tax. it will appear in P&L a/c as an expenditute.

2.Scheme of entries

lIABILITY OF FBT

FBT EXP A/C DR (INDIRECT EXPENSES)

    TO FBT PAYABLE A/C (DUTIES & TAXES)

AT THE TIME OF ADVANCE PAYMENT OF TAX

FBT PAYABLE A/C DR  (UNDER DUTIES & TAXES)

  TO BANK A/C

NOW THE B/S WILL LOOK LIKE:

IN P&L A/C FBT AMT AS AN EXPENSES

IN B/S FBT PAYABLE EITHER AS AN DR BAL OR CR BAL

DR BAL-- FBT AMT EXCESS PAID-YOUR CURRENT ASSET.

CR BAL--FBT AMT YET 2 PAY-YOUR CURRENT LIABILITY

 

Originally posted by :Guest
" 1. FBT is a type of direct tax. it will appear in P&L a/c as an expenditute.
2.Scheme of entries
lIABILITY OF FBT
 FBT EXP A/C DR (INDIRECT EXPENSES)
    TO FBT PAYABLE A/C (DUTIES & TAXES)
AT THE TIME OF ADVANCE PAYMENT OF TAX
FBT PAYABLE A/C DR  (UNDER DUTIES & TAXES)
  TO BANK A/C
NOW THE B/S WILL LOOK LIKE:
IN P&L A/C FBT AMT AS AN EXPENSES
IN B/S FBT PAYABLE EITHER AS AN DR BAL OR CR BAL
DR BAL-- FBT AMT EXCESS PAID-YOUR CURRENT ASSET.
CR BAL--FBT AMT YET 2 PAY-YOUR CURRENT LIABILITY
 
"


 

Thank U very much.

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