How to enter surrendered stock in books of accounts?

Mayank (Sr.Accountant) (152 Points)

24 December 2010

Hiiiii

I want to know if a business man surrenderd stock in Income Tax Investigation then how we can enter this surrenderd stock in the books?

I have credited to P&L appropriation a/c but i dont know which a/c would be Debited because this is not a purchase .

so kindly give me the right treatment on this problem as earliest as possible

thanking you

Mayank Rastogi

09808649992

0121-2534777

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3 Replies

Shweta Bansal (CA) (175 Points)
Replied 24 December 2010

This can be done by making a notional entry:

Purchases A/C Dr (only the amount Qty will be NIL)..................xxx

To P/L Appropriation A/C.................................................................xxx

This will increase your stock without corresponding increase in Quantity.

Shweta Bansal (CA) (175 Points)
Replied 24 December 2010

This can be done by making a notional entry:

Purchases A/C Dr (only the amount Qty will be NIL)..................xxx

To P/L Appropriation A/C.................................................................xxx

This will increase your stock without corresponding increase in Quantity.

g s ahuja (partner) (29 Points)
Replied 01 February 2011

since tax on surrendered stock has been paid it is better to add in closing stock in trading a/c to match the profit declared and tax paid.

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