W/off as bad debt

A/c entries 779 views 4 replies

let assume our party ABC pvt ltd not ready to pay Bill no. abc123 Net amt Rs.10,000/- Vat Amt Rs.1,000/- Gross Amt. Rs.11,000/- (party's outstanding amt. Rs.11,000/- same bill, bill is 2 year old)

we want to write off as bad debt, WHAT WILL BE ENTRY ?

1) Bad debt a/c      debit                  Rs.11,000/-

          To Party ABC Pvt Ltd a/c                                  Rs.11,000/-

OR

2) Bad debt a/c         debit                  Rs.10,000/-

     Output Vat a/c        debit                 Rs.1,000/-

                     To Party ABC Pvt ltd a/c                             Rs.11,000/-

in the 2nd entry can we take output vat Rs.1,000/- which was charged at the time of biling as input vat while writting off.

i know that we cant claim input vat after 6 month from the date of invice. am i correct?

please sugget. most urgent.

tanx

Replies (4)

1) We can not avail credit of VAT on Bad Debts.

Sapare sir u mean to say 1st entry is correct = i agree wit U

3) Sales a/c         debit                  Rs.10,000/-

     Output Vat a/c        debit                 Rs.1,000/-

                     To Party ABC Pvt ltd a/c                             Rs.11,000/-

(Being party not ready to pay bill no. abc123. therefore, bill reversed)

NOTE: (WE BOOKED CREDIT NOTE INSTEAD OF JV OF BAD DEBT)

IS THIS ENTRY CORRECT ?

Issuing credit note is appropirate.

It should be used only when actually goods are returned.

you should write off as bad debt only

but ca of the company (as employee of pvt ltd) not agree with the same. even he pass discount recived entry as;

Party a/c debit                Rs.XXX

     To Puchase a/c                              Rs.XXX

      To Vat input a/c                              Rs.XXX

(Being Discount received from party)

is this entry is correct?


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