Dear Friends,
WE are a small organisation and all bills (including big ones with stax, tds etc) are paid directly without making the bill booking entry, our internal auditor staff has suggested the following and request you to check and confirm:
current entry being passed by us for payment of bills:
Payment Entry:
Dt. 13/05/2013
Dr. Exp Ac 5000
Dr. Stax Input Credit (if applicable) 500
Cr. TDS of Contractor (if applicable)
Cr. Bank A/c (for cheque to Party) 5500
Our internal audit staff has suggested to split the entries and first book the bill and then make payment to creditor. This step we are not following since all bills received by us comes with payment approval only, so there is no point in booking the bill and passing it the same day:
As per Audit Stafff following entry is correct , also our Audit Staff is telling TDS needs to be also booked and their view is just like for Stax for TDS payment to government should not be made on basis of Actual Payment date but to be made on basis of date of deduction, but never before we have made booking entry with TDS as it wont be correct entry because TDS should be deducted only during payment to creditor and paid on basis of payment date or credit date whichever is earlier. :
1 Journal Vchr
Dt. 13/05/2013
Dr. Exp Ac 5000
Dr. Stax Input Credit (if applicable) 500
Cr. Party A/c 5500
2. Payment Voucher
Dt. 13/05/2013
Dr. Party A/c 5500
Cr. TDS of Contractor (if applicable)
Cr. Bank A/c (for cheque to Party) 5500
We have agreement with office landlord that we will pay rent before 10 of everymonth. But rarely do pay rent before 15 as we have good understanding with them. Rent for Dec month was paid on 04Jan (voucher dt, chq dt) due to some delay and TDS was deducted on 04 Jan and paid on 04Feb Auditors mention that even if rent was paid in Jan it is Dec rent hence TDS should have been booked and paid before 7 Jan itself. I did not agree to this.
All the above points are put by audit staff (articleship students) and today only i am going to discuss this with the auditor (main ca) hence would also require your views ;)
CAclubindia
