Query about write off debtors & creditors

ITC / Input 3358 views 10 replies

Dear All,
if I want to close my debtors and creditors balance in current year what entry should I pass in tally? plz answer along under head.

Regards
Samir Shaikh

Replies (10)
pass the journal both but again you have in balance sheet

Dr.Written Off

Cr. Party's A/c

If you want to close S.Drs account

for creditor, it can't be as per written in real basis.. but if the amount is small and sure that u won't pay .. then u can write off... but anyway, in audit they will ask the reason for such write off..

entry:
Dr: party (s.crds) a/c
cr: misc income(or) liability no longer payable account (or) discount received.
but if the amount not material (small)you can prefer to adjust it with crediting bad debts, thereby reducing the total bad debts balance also..

1)  for  Debtors  write off 

 Bad  Debts                       A/c  Dr 

To  Sundry Debtors           A/c  Cr 

(  Being  sundry debtors  write -off )  

Bad debts a/c will be  transfer to  P&L   under  Indirect  expense  

 

2)  For  sundry creditors  write off 

    Sundry  Creditors          A/c  Dr 

    To sundry creditors  write off    A/c  Cr 

(Being  sundry  creditors write off ) 

Sundry creditors write off  A/c  will be transfer to p&L  under  indirect  Income  

you adjust in cashbook
Normally we write off after 3 to 4 years
agreed with prasad sir entry.
agreed with prasad sir ji

WHAT IS TO BE TREATMENT OF ITC TAKEN UPON PURCHASE, WHEN THE PAYMENT DUE TO THE SUPPLIER IS WRITTEN OFF???

MEANS PAYMENT WILL NEVER BE MADE. MOREOVER, WHAT IF PARTIAL AMOUNT IS PAID AND PARTIAL AMOUNT IS WRITTEN OFF?

As per section 16  of the CGST act 2017   you  have  to reverse the  ITC  if payment is not  made  with in 180 days  form the date of  issue  of Invoice by the supplier  and add back to your tax  liability  in case payment will be never made  by  recipient . 


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