Master in Accounts & high court Advocate
9610 Points
Posted on 14 December 2024
Let's analyze the given accounting entries:
*Entry 1: Payment of Goods Purchased* Debit: GST A/c ₹10,000 Credit: Bank A/c ₹10,000 This entry seems incorrect.
When a buyer purchases goods, they would typically debit the Purchase A/c (or Inventory A/c) and credit the Bank A/c.
The GST input tax credit would be claimed separately.
*Entry 2: Payment of Goods Sold* Debit: Bank A/c ₹12,000 Credit: GST A/c ₹12,000
This entry also seems incorrect. When a seller sells goods, they would typically debit the Bank A/c and credit the Sales A/c.
The GST output tax liability would be accounted for separately.
*Entry 3: Payment of Input Tax Credit to the Government* Debit: Input Tax Credit A/c ₹2,000 Credit: Bank A/c ₹2,000 This entry seems incorrect.
When a taxpayer pays input tax credit to the government, they would typically debit the Bank A/c and credit the Input Tax Credit A/c.
Corrected Accounting Entries: 1. *Purchase of Goods* Debit: Purchase A/c (or Inventory A/c) ₹10,000 Credit: Bank A/c ₹10,000 Debit: Input Tax Credit A/c ₹2,000 (assuming 20% GST rate) Credit: GST A/c ₹2,000 1.
*Sale of Goods* Debit: Bank A/c ₹12,000 Credit: Sales A/c ₹12,000 Debit: GST A/c ₹2,400 (assuming 20% GST rate) Credit: Output Tax Liability A/c ₹2,400
1. *Payment of GST Liability* Debit: Output Tax Liability A/c ₹2,400 Credit: Bank A/c ₹2,400 .