Journal Entry


(Guest)

 

Today i was doing a company's tax audit and i noticed a journal entry which was as follows:-
VAT Tax Payable A/c Dr.
  To Income a/c
 
So i asked my senior about the same and he replied that it happens when people want to save or get rid of tax liability..
 
Please suggest whether the accountant was correct in passing such a journal entry..
Thanx in advance!