It's too urgent

Can any one tell me about basic rule under double entry system of creating various provisions as per Schedule VI (for example provision for income tax, provision for bad debts etc)

Replies (4)

Dear

Normally most of the year end March Expenses willbe paid only after the period viz., from April onwards. for example, Salary,PF,ESI,Profession Tax,Telephone Bill, Rent,Insurance,Interest to Bank (OD) if any & other expense will be wiped out subsquently. So If we make a provision for all the above either under one roof as "provision for expenses" or you can a/c under the same a/c head with addition of payable as suffix.

The purpose being of for to a/c the expenses pertains to the same financial year during the year or to reduce the burden of profit/loss during the year itself.

Originally posted by : V P Narasimhan


Dear,

thanks for your reply

Can you please tell me what is right way of creating Provision for Income Tax at the year end.

 

My second query is when we receive a bill for any service what will be right entry to be pass.

For example if i claim cenvat credit and bill receive for INR 10000/-

ST is 12.36%

then what will be journal entry to be pass at that time.

 

And after that at the time of payment what will be journal entry if TDS rate is 10.30%.  


Hi...Sourabh,

If you are receiving service then You should pass an entry like :

 

Service A/c          Dr         10000

Service Tax input A/c  Dr   1236

               To Party A/c                                    11236

 

 

Same way If you are making payment of above party then you should deduct TDS on gross amount .....

Party A/c           Dr     10079

TDS A/c           Dr      1157

                      To. Cash/Bank     A/c       11236

 

 Regards,

Krishna Ashara

 

nice reply.

 

 

Regards

Ankur

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