Reveresal of expenses

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I have booked expenses and pass the following entry -

Expenses A/c Dr.             1000.00

Service Tax   Dr                 103.00

                   To Creditors  A/c                 1080.94

                   To TDS                                   22.06

 

Now at the time of Finalization of Books for FY 11-12, it came to know that This creditors is no longer payable & hence require to w/off. Hence pls suggest which entry should be passed out of below two -

Here I assume that full service tax has to be reversed.

1) Creditors A/c Dr.                        1080.94

                 To Service Tax                            103.00

                To Expenses                                 977.94

 

OR

Here I am assuming that service tax should be reversed with 10.30 % of total expenses

2) Creditors A/c Dr.                          1080.94

                 To Service Tax (1080.94/110.30*10.30)     100.94

                 To Expenses   (1080.94/110.30*100.00)            980                       

 

 

Please confirm & also share the reason.

Replies (1)

for a more clear accounting,  the 'sundry Creditor's written back' account shud be used, instead of crediting the expense A/c, as this would show the true picture.  the entry would be as follows:

Creditor's A/c   Dr

To Sundr Cr's written back

to ST

What about TDS? Has this being deposited to the Cent govt, if that is the case then you will be requried to issue TDS certificate to the supplier, as he cannot take the TDS from the client.


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