Printing and stationery prepaid

1459 views 3 replies

CA Parul Saxena

8527 Points Joined May 2010

A company has received a bill of printing and stationery on 28.03.13 for the work of the year 2013-14.....the company has booked this transaction as follows:-

28.03.13 Printing and Stationery prepaid.......................Dr.

To Party......................................................

payment made on 20.04.13

20.04.13 Party.................................................Dr.

To TDS Payable

To Bank

20.04.13 Printing and Stationery.....................Dr.

To Printing and Stationery Prepaid

Whether the company is right in making entries....in my opinion prepaid expenses should not be recorded in 2012-13 as nothing has been prepaid on account of expenditure.Plz share your valuable views.

Replies (3)

Ganeshbabu K

Audit and Tax Advisory

48564 Points Joined May 2012

better pass first entry on 01.04.2013 instead on 28.03.2013

if not

we need to pay tds if it is applicable to party

and

it is the expenditure of year 13-14 but if we do as above it is nothing but we are expencing in 12-13

CA Parul Saxena

8527 Points Joined May 2010

My views are same as of you......but my vice president said as the party would have been booked it on 28.03.13 so we are also supposed to book it on 28.03.13.

Ganeshbabu K

Audit and Tax Advisory

48564 Points Joined May 2012

if that is the case

he need to discharge tds liability if any..if not discharged yet to be discharged with interest for 3 months will be applicable .

and he cannot expence it to year 12-13 some ledger should be created and all such expences can be parked in it after 01-04-2013 we can book expences for the same in 13-14 by passing reverse entry.