Journal entry

HELLO FRIENDS, PLS. TELL ME JOURNAL ENTRY OF THIS:

IN A PURCHASE BILL IT IS SHOWN

AMOUNT - SAY RS.                5000

- CASH DISCOUNT-                500

TAXABLE AMOUNT -             4500  

VAT 4500 @ 10% -                    450

SURCHARGE -                         45

TOTAL                                      4995

PLS. HELP ME.

THANKS.

Replies (17)

Purchases A/c        Dr. 5000

Vat A/c                      Dr.450

Surcharge               Dr.45

  To Cash Discount A/c          500

  To Party/Cash/Bank A/c       4995

Puchase A/c            Dr.  5000/-

Vat A/c                      Dr.    450/-

Surcharge               Dr;    45/-

To Dicount                                     Cr.500/-

To Party                                          Cr.4995/-

Agreed to the above!!!

agree with Bhusan

thanks chirag..

Originally posted by : Bhushan Jaju

Purchases A/c        Dr. 5000

Vat A/c                      Dr.450

Surcharge               Dr.45

  To Cash Discount A/c          500

  To Party/Cash/Bank A/c       4995

agreed with all

The above is correct.

I feel CASH DISCOUNT need not be brought into book as per basic accounting concepts. Secondly it will pose a problem under VAT since purchase value is NOT PROPORTIONATE to the amount of input claimed

First u should right your vat amount.

vat should be charged on 5000 not on 4500. then the cash discount is given.. If you will provide vat on 4500, it means government lose vat on amount of 500, which is not admissible..

Then entry will be:

Purchase a/c Dr.

Vat a/c Dr.

To Cash

To Cash Discount

I disagree with Mr.Sourabh. DISCOUNT isa valid deduction under various VAT acts including CST. As such there is no problem with discount here.

give me a link of relevant page where cash discount is a valid ground for deduction..

Sir, there is a difference between trade discount and cash discount... and your provision will applicable on trade disoc*nt.. not on cash discount..

otherwise see me relevant page of this provision.. Just tell me section of relevant act.. i will see it..

don't take otherwise.. every person has its own view..

I agree with this entry

 

 

Manoj kumar upadhyay

purchase a/c (dr.)-4500, Vat(dr.)-450, Surcharge(dr.)-45, To cash-4995. . . Purchase shown net of discount.. By doing ths u wil nt be getng problem at ur sales tax asesment..

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