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Year end provision entry

Manjula (Accountant ) (117 Points)

20 April 2021  
i have received the bill dated 05/04/2021 for freight charges which is pertaining to 2020-21.Now I want pass provision entry for the freight charges for 2020-21 with tds effect.
is the below entry is correct?

Dr.Freight charges -Rs.100/-
Cr.TDS- Rs.2/-
Cr.Expense Payable (not party)-Rs.98/-


Dr.Freight charges -Rs.100/-
Cr.TDS- Rs.2/-
Cr.ExpensePayable (not party)-Rs.100/-
Dr.Party A/c -Rs. 2/-

please clarify which is correct entry with reason for the correct entry.

 3 Replies

Replied 20 April 2021

Since you have the bill and know the party , you can credit 98 to party and 2 to TDs payable

Manjula (Accountant ) (117 Points)
Replied 20 April 2021

Bill date is Apr 5 financial year 21-22 right. How can I credit party account

Replied 20 April 2021

Though bill date is April 5, you say expenses all pertain to year 20-21.

or else you can credit expenses payable 98 in 20-21 and reverse it to party account in 21 -22, but the TDs credit you have to give in 20-21.

so in my opinion my first option is better unless you have a software problem in accepting bill dated april 5.

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