journal entry for addition tax paid for last year assessment

A/c entries 1927 views 4 replies

what is the journal entry for additional tax paid for last years assessments anc can we book this payment as an expenses in current year books or do we need to book it to the pertaining year only

Replies (4)

I think this should be the current year expense..

if income tax paid is not allowed as expense so it should be charged to owner's equity however interest part can be booked as expense.

Thanks, but what would be the journal entry for these kind of payments?

The entry will be...

Provision for Tax (L.Y.) A/c ...........Dr.                                       xxx

Profit & Loss (for excess tax liab.) A/c ............................Dr    xxx

              To Advance Tax Paid/TDS A/c (if any)                                            xxx

              To Cash/Bank A/c                                                                             xxx

(Cash or Bank A/c shall credited with the amount of excess tax paid pertaining to last year.)


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