Journal entry

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 November 2013 Sir I receive the bill from security service Bill value-20000/-,& ST 25% 618/-,Total Bill Amount-20618/-,75% ST We have to pay so how can i pass the journal entry,entry passed below method is this correct r not? kindly guide me....

(75% Value of 20000/-)
(Indirect Exp)Service Tax 12% Dr-1800
(Indirect Exp)Edu Cess 2% Dr - 36
(Indirect Exp)sec Edu Cess 1%Dr - 18
To(Lia Ac)Service Tax Payable 12% -1800
To(Lia Ac)Edu Cess payable 2% - 36
To(Lia Ac)Sec Edu Cess Payable 1% - 18

Payment Entry
Service Tax payable Ac
Bank

Annu Agarwal

Annu Agarwal (Expert)
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10 November 2013 The entry done is correct.But it is advisible that instead of debiting service tax you the debit the expense account itself.

Querist : Anonymous

Querist : Anonymous (Querist)

12 November 2013 Thanks for your reply.if i debit the actual expenses account,the original amount will be reduced

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Annu Agarwal

Annu Agarwal (Expert)
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12 November 2013 Sir
How can debiting the expense account can lead to reduction in the original amount .Please explain.May be I need to correct myself.

Querist : Anonymous

Querist : Anonymous (Querist)

13 November 2013 If deduct st actual exp a/c means
Security Charges a/c dr 20618
to party ac 20618

Journal Entry for service tax
Service tax a/c dr 1854
to security charges ac 1854

so security charges expenses ledger balance will be reduced rs.18764

it think it may be wrong r right u just clarify with any expert iam a beginner thats y...