ACCOUNTINGDOSE

Companies, firms and sole proprietor who are doing business has to pay income tax on profits. There are some transaction in which third party will deduct TDS and will pay the balance amount to us and the party will issue a certificate for TDS/TCS. The journal for the same was explained in previous article. For TDS receivable article click here We have understood in our previous article regarding closing entries it consist provision for income tax entry, and this provision have to be closed in beginning of next year(april) or on date of income tax payment(i.e. july or sep) For CLOSING ENTRIES article click here Usually in normal course we used to pass one compound journal entry for closing income tax provision account. Let us understand this concept by taking illustration Income tax provision = Rs.100000/- Advance tax = Rs.60000/- TDS & TCS =Rs.20000/- Journal for Closing Income tax provision SL.NO PARTICULAR DEBIT CREDIT ...

Closing entries for the financial year ending Hello everyone, Here we are going to learn how to close books of accounts on the financial year ending by considering following things:- Closing stock Depreciation Provision for expense Closing stock Let us start to understand why it is required to pass journal entry for closing stock because to know the material consumed during the period(12 Months) , the value of closing stock includes raw material ,Work in progress , finished goods and loose tools etc . The amount for the stock will be derived by the store keeper from the rates available from market, generally as per accounting standard the stock is valued at cost or net realizable value whichever is less. Now we need to learn how to pass journal entry for closing stock , Illustration: Value of stock as on 31 st march 2015 Raw material Rs.100000 Work in progress Rs.500000 Finished goods Rs.1000000  Lose Tools Rs.25000

JOURNAL FOR MONTHLY PROVISIONS TO KNOW THE PROFIT OR LOSS Here we are going to learn about monthly provision entry,and to pass the journal entry we have to arrange following data. Closing stock value of Raw material, Work in progress and finished goods for the month end. Salary payable. Purchase of material Other fixed expense payable. Printing and stationery Internet Charges Provident fund(employer contribution) ESI ( employer contribution) Travelling charges Conveyance Staff welfare AMC charges Power Charges Security Charges Transport Charges Professional Charges Interest and bank Charges

JOURNAL ENTRY FOR ADJUSTMENT OF CENVAT CREDIT AGAINST EXCISE DUTY PAYABLE. Excise duty is levied on manufacturing of goods the manufacturer or trader of goods have benefit of availing excise duty input which is known as CENVAT credit at the time of purchase of raw material and other capital goods. CENVAT credit is adjusted against excise duty output, Before writing entry for adjustment I want to explain two terms 1) Excise duty input 2) Excise duty output          A)    Excise duty input Journal entry for purchase including excise duty of Rs.14000                     Purchase A/C  Dr                   86,000            Excise duty Input A/C Dr        14,000          ...

Journal entry for Bad debts & Provision for Bad debts Hello everyone, here we are going to learn how to pass journal entry for bad debts and provision for bad debts, let us understand the difference between bad debts and provision for bad debts. BAD DEBTS : - A bad debt is debt that is not collectible and therefore treated as worthless. This usually occurs after all attempts are made to collect but failed. The debtor may going to bankrupt. This is treated as loss in books. PROVISION FOR BAD DEBTS : - On the basis of previous year bad debts the percentage of bad debts are considered as provision for bad debts and it is a balance sheet item shown as liability. The provision for bad debts is treated as expense in income statement.

Journal entry for Salary: - Salary paid company includes allowances and deductions. Allowances are many types I am giving you some examples: - Types of allowances:- Dearness Allowance : - It is a cost of living adjustment allowance paid to employees in India. It is calculated as a percentage of basic salary to moderate the impact of inflation on employees. The DA vary according to areas (whether rural or urban) House Rent Allowance : - It is given by employer to the employee to meet the rent expense. Performance Allowance : -It is given to employee when they achieve the target given by the employer. Transport Allowance : -It is given to employee in order to meet the expense to come to office from employee residence. Children Education Allowance : -It is paid for education of employees children. Medical Allowance : -It is given to employees to medical expenses. Uniform Allowance : -It is given to employees for the expenditure. incurred on purchase or main...

Journal entry for foreign exchange fluctuation (Exports) As per Accounting standard 11 : The effects of changes in foreign exchange rates A foreign currency transaction should be recorded ,by applying the foreign currency amount the exchange rate as on date of purchase. Foreign exchange fluctuation is difference between the rate of currency at the time of sale and the rate at the time of receipt. The rate of currency in the market will varies daily it causes loss or gain to entity.  Let us see a simple illustration:- Computation of foreign exchange loss or Gain Currency Rate as on purchase less Currency rate as on payment =  If difference is negative then it is treated as loss, If difference is positive it is treated as Gain. There are different situations in foreign exchange as follows: - 1)    Sale&Receipt within same financial year. 2)    Sale in one financial year &Receipt in next financial year.

Journal entry for foreign exchange fluctuation (Imports) As per Accounting standard 11 : The effects of changes in foreign exchange rates issued by ICAI A foreign currency transaction should be recorded ,by applying the foreign currency amount the exchange rate as on date of purchase. Foreign exchange fluctuation is difference between the rate of currency at the time of purchase and the rate at the time of payment. The rate of currency in the market will varies daily it causes loss or gain to entity.    Computation of foreign exchange loss or Gain Currency Rate as on purchase less Currency rate as on payment = If difference is negative then it is treated as loss, If difference is positive it is treated as Gain. Journal Entry for foreign exchange (Purchase & Payment made within financial year) A ltd purchased material of $15000 on 01 st February 2015 from BUK CO. The Due date is on 15 th march 2015.  $ is quoted at market as on 01/02/2...

Journal Entry for custom duty on purchase import Custom duty is applicable on purchase imports, the importer is liable to pay duties on import of material. Duties include Custom duty, Excise duty, Additional Excise duty & cess (Education cess, Secondary higher education cess) on both custom duty & excise duty. The duty details are available in Bill of Entry document issued by Custom authorities at import location. The entry will be as follows: -Import of 100000/- worth material.                                Custom Duty A/C                         Dr      7500                     ...

Journal Entry for Fixed Deposit Fixed deposit Rs. 100000/- was deposited in SB BANK                    Fixed Deposit A/C             Dr      100000                              To SB BankA/C                                         100000   (Being fixed deposit was done in SB) Rules for passing Journal entry Debit Fixed deposits are treated as non-current asset or current asset is depended on maturity period, if maturity period is less than one year...

Journal entry for manpower expense with service tax reverses charge As per service tax rules under reverse mechanism if service receiver is either private Ltd /Public Ltd and service provider is Sole proprietor /Partnership firm. Then service receiver has to pay service tax instead of service provider. This is applicable for both Man power services and work contract. Particular                       Service provider share                                          service receiver share                                          Manpower service                     ...

Journal entry for expense with service tax reverses charge Basically the service tax is collected and paid by the service provider, but there are some services for which the service receiver has to pay service tax, this system is called service tax reverse mechanism. This is applicable to companies and other type of entities irrespective of exemption limit (i.e. Rs.10 lakh).The service tax paid is eligible as CENVAT credit only services related to productive as per clarifications from the CBEC(Circular No.943/04/2011-CX,dated 29-04-2011) with regards to input and input services. Here I am giving the list of service for which service receiver has to pay Carriage Inward and outward Manpower services received by public or private ltd from firm or sole proprietors   Work Contract service   Legal Service   Insurance agent service   Sponsorship service   Rent a cab service

Journal entry for Service related Expense (excluding TDS) Expense of the organisation include both direct and indirect .They may be related to services received by company in so many ways like Professional services, Rent, Contract services etc. The service receiver is liable to deduct on services at the time of booking or payment as per Expense tax act. Let us see some illustration Journal entry for Rent expense Rent paid to Parkas co. Rs.12000/-                    Rent A/C      Dr                          12000                          To Parkas Co. A/C                          ...

Journal entry for Service income (excluding TDS*) Service income may be auxiliary income of the organisation in case of manufacture companies and direct income in case of service companies. The services are like contract, rental income, professional income and letting out assets are tax deductible services as per Income tax act. *TDS=TAX DEDUCTED AT SOURCE.  Let us see some illustration Journal entry for service income Job work service to X .Ltd for Rs.10000/-                              X.Ltd A/C     Dr                10000                                   ...

Usually in some cases the debtor and creditor will be same party .At the time of settlement the balance payable or receivable will be adjusted against balance receivable or payable. So,for better understanding I am giving illustration below. Company name: Tat chemicals CO. Transactions are: Sale of Rs.100000/-                           Purchase of Rs.125000/- Here for sale to Tat chemicals separate account will be maintained by name Tata chemicals (Sale)                        Here for Purchase from Tat chemicals separate account will be maintained by name Tat chemicals (Purchase) Journal Entry for Sale            Tat chemicals (Sale) A/c Dr  100000/-                  ...

Journal entry for Sale of Asset for profit                                   Bank A/C      Dr                         6500 To old Machinery A/C (WDV)                  4500                          To Profit on sale of Machinery A/C          1500*                          To Excise duty payable A/C                     500

Journal entry for purchase of Asset (Exchange) for loss                Machinery   A/C                            Dr     8600 Excise Duty received (50%) A/C     Dr       700 Excise duty receivable (50%) A/C  Dr        700                 Loss on Exchange of machinery A/c Dr     500                                 To Sundry Creditor A/C                         9500                                 To old Machinery A/C               ...

Journal entry for purchase of Asset (Not ready to use) Purchase of machinery of Rs.10000/- including excise duty of Rs.1400/-                  Machinery (WIP) A/C                        Dr          8600 Excise Duty received (50%) A/C     Dr          700 Excise duty receivable (50%) A/C   Dr          700                                        To Sundry Creditor A/C               10000

Hi friends, here  we are going to learn journal entry for Purchase return. Usually in accounting software we need to pass journal entry but before these we have to understand types of Purchase return  1) Partly quantity returned  2)whole quantity returned

Hi friends, here we are going to learn journal entry for Purchase. Usually accounting software there is no need to pass journal entry like below                         SL.NO PARTICULAR DEBIT CREDIT 1 Purchase or Material    A/c       Dr          To Sundry Creditor   A/c XXXXX XXXXX Because in software there is separate entry field for Purchase, the required details will be updated in Purchase and Sundry Creditor ledgers. Purchase are divided into cash Purchase and credit Purchase and further sub categorized into manufacturing Purchase and trading Purchase. But i am giving brief explanation for the first entry here:-