FBT

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Assistant Manager-Finance

615 Points Posted on 01 October 2008

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)

article

107 Points Posted on 01 October 2008

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

460655 Points Posted on 01 October 2008

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

Assistant Manager-Finance

615 Points Posted on 01 October 2008

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	"