FBT

L KANAGARAJ (Assistant Manager-Finance) (615 Points)

01 October 2008

Sirs'

Please explain me about.

1. FBT paid- whether it is an expenses or current asset?

2.In my company every quarter we paid the FBT. But we made entries like

FBT A/c Dr Rs.100

to FBT payable (07-08) Rs. 100

and at the time of payment

FBT paid (07-08) Rs. 100

To Bank Rs. 100

Here FBT under the group of Indirect Expenses.

FBT payable (07-08) under the group of Statutory Liabilities

FBT Paid (07-08) under the group of Current Assets.

What is the reason behind it.

Because we can make it like

FBT payable(07-08) A/c Dr. Rs. 100

To Bank Rs.100.

please explain.

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3 Replies

pankaj (article) (107 Points)
Replied 01 October 2008

See FBT Paid is our Current Assets .Because it is an advance payment made to the Govt.

(Guest)

1. FBT is a type of direct tax. it will appear in P&L a/c as an expenditute.

2.Scheme of entries

lIABILITY OF FBT

FBT EXP A/C DR (INDIRECT EXPENSES)

TO FBT PAYABLE A/C (DUTIES & TAXES)

AT THE TIME OF ADVANCE PAYMENT OF TAX

FBT PAYABLE A/C DR (UNDER DUTIES & TAXES)

TO BANK A/C

NOW THE B/S WILL LOOK LIKE:

IN P&L A/C FBT AMT AS AN EXPENSES

IN B/S FBT PAYABLE EITHER AS AN DR BAL OR CR BAL

DR BAL-- FBT AMT EXCESS PAID-YOUR CURRENT ASSET.

CR BAL--FBT AMT YET 2 PAY-YOUR CURRENT LIABILITY

L KANAGARAJ (Assistant Manager-Finance) (615 Points)
Replied 01 October 2008

Originally posted by :Guest
"	1. FBT is a type of direct tax. it will appear in P&L a/c as an expenditute. 2.Scheme of entries lIABILITY OF FBT FBT EXP A/C DR (INDIRECT EXPENSES) TO FBT PAYABLE A/C (DUTIES & TAXES) AT THE TIME OF ADVANCE PAYMENT OF TAX FBT PAYABLE A/C DR (UNDER DUTIES & TAXES) TO BANK A/C NOW THE B/S WILL LOOK LIKE: IN P&L A/C FBT AMT AS AN EXPENSES IN B/S FBT PAYABLE EITHER AS AN DR BAL OR CR BAL DR BAL-- FBT AMT EXCESS PAID-YOUR CURRENT ASSET. CR BAL--FBT AMT YET 2 PAY-YOUR CURRENT LIABILITY	"