Accounting treatment of trade registration

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 March 2015 Dear Sir,

I have paid rs 10,000 for our company trade registration.

Request you to please advise me accounting treatment for the same.

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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30 March 2015 If this registration is valid for one year charge to rates and taxes . if this is of permanent nature transfer to assets.

Querist : Anonymous

Querist : Anonymous (Querist)

30 March 2015 sir please advise me i will pass how many entries in tally ?

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Asha Kanta Sharma online

Asha Kanta Sharma

(Expert)
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14 July 2024 For recording the payment of Rs. 10,000 for trade registration in Tally, you typically need to pass two entries: one for the payment itself and another for accounting the expense incurred. Here’s how you can do it:

### 1. Entry for Payment Made:

Assuming you made the payment through bank:

- **Payment Entry:**
```
Bank Account Dr 10,000
To Cash (or Bank Payment) Account 10,000
```

Explanation:
- Debit the Bank Account to reflect the reduction in your bank balance due to the payment.
- Credit the Cash (or Bank Payment) Account to record the outflow of cash.

### 2. Entry for Trade Registration Expense:

Assuming the expense is related to registration fees:

- **Expense Entry:**
```
Registration Expenses Account Dr 10,000
To Bank Account 10,000
```

Explanation:
- Debit the Registration Expenses Account to record the expense incurred for trade registration.
- Credit the Bank Account to link the payment made to the expense.

### Explanation of Entries:

- **Bank Account (or Cash Account):** This represents the asset account from which the payment is made. It decreases because cash or bank balance is reduced by the payment.
- **Registration Expenses Account:** This is an expense account where the cost of trade registration is recorded. It increases as a result of the payment made.

### Additional Notes:

- Ensure the expense account used (here, "Registration Expenses Account") aligns with your company’s chart of accounts in Tally.
- If the payment was made through cash instead of bank, adjust the entry accordingly by debiting the Cash Account and crediting the Cash Payment Account in Tally.
- Always verify the applicable tax treatment or any specific requirements related to trade registration expenses based on local regulations or company policies.

By following these entries in Tally, you accurately record the payment made for trade registration and properly account for the expense incurred in your company's financial records.