Financial Accounting entry as per Bill Date/Entering into transaction Date/Due Date of Liability arising(If mercantile system)....

If movement of stock is also involved and stock register is also maintained then only entry in stock register would as per stock movement date.

Financial Accounting entry as per Bill Date/Entering into transaction Date/Due Date of Liability arising(If mercantile system)....

If movement of stock is also involved and stock register is also maintained then only entry in stock register would as per stock movement date.

Bill dated 100%

from the above comments it shows no one have practical knowledge.... in many companies there is system of locking the accounts i.e. u can not make back date entry... if u made that entries problem arises in TDS, MONTHLY MIS REPORT GET ALTERED FORM EVERY ENTRY... SO MR. SACHIN TAKE A EXAMPLE BILL DATED 25 JANUARY..AND U HAVE RECEIVED ON 25 FEB. U HAD ALREADY PAID TDS OF JANUARY WITHIN 7 FEB. NOW IF U MADE ENTRY ON 25 JAN. U SHOULD REVISE UR TDS PAYMENT pay interest also AND EVERY QUARTER U SHOULD REVISE UR RETURN...... DUE TO THIS PASS THE ENTRY ON RECEIPT BASIS....

basic funda is substance over form

basic funda is substance over form

basic funda is substance over form

Originally posted by : Prince
	but this can create a problem when bill is received after year end after the books are finalised.. how can u revise the book from back date in that case..?? that bill have to be included in next year only !!

I don't think this will create any issue or problem in accounting considering an year. As Mohd. Zuheib said bill should be entered on date of bill.

Yours is an Event management company, your company must have called for the tender or so. The point of the discussion is that if the bill is received late what will be the date of recording the bill. As you know that if you avail any services or procured any goods from someone there arise an obligation on the part of the company that the outflow will be certain. If the bill is not provided within the accounting closing date you have to estimate the amount and provide for the provision in the books. When the bill is received after the accounting close date provision must be adjusted to give proper effect in the books.

On the other hand if you have the bill within the accounting closing date you book bill on the date on bill. There may arise a practical difficulty that you have to deduct TDS or you have to claim VAT setoff on the goods so all this depends on the bill date, it will result in loss to the company when the bill is received late. So in this case your company may enter into an agreement with the supplier that he have to produce bill within the cut-off date. If you do not have agreements then return the bill to the supplier to forward the bill in next billing cycle. If the supplier is prominent and have proper internal control they will issue the bill on time. Usually bills are received late for the suppliers who do not have proper internal control.

Booking of Expense/Bills depends on the accounting polices you follow not on what will be the implication. So as you follow the mercantile basis of accounting you will have to record the bill on the date on the bill.

You should record as soon as the good is received because the purpose of accounting is recording and most importantly immediate recording. thanks leave a reply.

There seems to be contrary views by many of us have. Take a case when you book the Bill on dated basis and purchases are recorded and as a result, to that extent your GP reduces. However, the actual stock movement takes place only in the subsequent quarter or year as the case may be and therefore, you are unable to inflate or include your closing stock to nullify your purchases. due to this accounting scenario, the Bill should be booked on the basis of actual movement of goods.

Where as in case of CST Purchases, they insist on reflecting the Bill dated accounting in their periodic returns, to apply for C forms to be issued to party irrespective of material (actual stock) movement or accounting.

What is the right? Could any of our Members throw more explanation?

Hi everyone.... jus go through dis link...https://en.wikipedia.org/wiki/Matching_principle

Basic criteria to decide on the accounting of expense is method of accounting followed...

If u r following cash basis of accounting,,,leave all things apart n record the exp oly on d date of payment... if u r followin accrual principal , record the related expense as soon as the sale takes place...

So no need to depend on bill date in any of the above case.....

And Dear Tej prakash,

 the concept of TDS doesnt arise wen our point of discussion is only about accounting an exp related to sale...unless there is a contract b/w seller and goods transporting agency...

Replies awaited....

Regards,

Subramanya

I think mr. subramnya has not understood the practicality of the transaction taking place in day today business environment. The basic question remains as it is. Pl leave apart the accounting priciples at the moment. Here, the case is Bill moved first and the materials moved in subsequent period or after FY expires. What shud one do? whether book the entry dated wise or material receipt wise. If date wise, than the Financial scenario changes as the closing stock is not correctly reflected and Compnay's GP shows wrong picture.

And contrary to the principle, in VAT / CST accounting the Authorities insist on period wise accounting for issue of Form ' C '.

Could some one again join for futher discussion? 

Yes I agree, as far as the services are concerned you can always make provision to the near estimated figure and later make contra in the subsequent FY.

Hi Mr Naresh thanx for ur valuable input,

U have left accounting principle for too long i guess...

Stock in trade is d stock available for sale and not the stock that is left by customer to take delivry on a future date...so no point in including dat stock in trading a/c...thereby Gp is not affected...

General rule as per contacts act is the sale shud be recorded as soon as the risk is transferred to customer...once the bill is raised den oly the risk is transferred to him...so record the sale as on date of bill which is the probable date of transfer of risk...

And i dont find any problem wrt to VAT n CST if d above principle is followed...

i m web service provider, recently i make 12000 sales, and i make invoce for 12000, as 33% in advance, i.e., 12000/3= 4000, and 33% after completion and 33% after completion 1 month ( under maintenance period) so how would i make general entries, and i m new user of TALLY ERP so how would i make sales entry and voucher entry,