Please clarify me what entry should be passed in case of Provision for Audit Fees(consider TDS also) and entry for subsequent year.
26 Replies
shushantsinghal
(BCOM(HONS),C.A)
(283 Points)
Replied 20 May 2010
TAX AUDIT FEES A/C DR.....(EXPENSE)
TO ABC & CO. A/C CR....(CURRENT LIABILITY)
TO TDS PAYABLE A/C CR.....(DUTIES & TAXES)
shushantsinghal
(BCOM(HONS),C.A)
(283 Points)
Replied 20 May 2010
NEXT YEAR.....
TDS PAYABLE A/C DR....
TO BANK /CASH A/C
ABC & CO A/C DR....
TO BANK/CASH A/C......
Somaas Kandan
(CA Final)
(385 Points)
Replied 23 May 2010
Provision Entry will be
Audit Fees A/c Dr xxxx
To Audit Fees Payable A/c xxxx
To Tds Payable A/c xxxx
Next Year the entry Should be reversed.
Audit Fees payable A/c Dr xxxxx
Tds payable A/c Dr xxxxx
To Bank A/c xxxxx
CMA.Baskar.V
(Cost Accountant)
(400 Points)
Replied 23 May 2010
Dear Sommas,
Once TDS deducted in current year, we can not reverse the same in next year. According to Income tax act, TDS has to deduct from Vendor Account, at time of accouting of bill or at time of payment whichever is earlier.
Dear Jasmeet,
Current year to make provision, entry will be
Debit - Audit Expeses A/c
Credit - Provision for Expenses \ Audit Expeses Payable A/c
In next year, after invocie receipt from vendor
Debit - Provision for Expenses \ Audit Expenses Payable A/c
Credit - TDS Account
Credit - Vendor Account / Creditors Account
I hope above clear your dobut
(Guest)
| Originally posted by : CMA.Baskar.V | ||
 |
Dear Sommas, Once TDS deducted in current year, we can not reverse the same in next year. According to Income tax act, TDS has to deduct from Vendor Account, at time of accouting of bill or at time of payment whichever is earlier. Dear Jasmeet, Current year to make provision, entry will be Debit - Audit Expeses A/c Credit - Provision for Expenses \ Audit Expeses Payable A/c In next year, after invocie receipt from vendor Debit - Provision for Expenses \ Audit Expenses Payable A/c Credit - TDS Account Credit - Vendor Account / Creditors Account I hope above clear your dobut |
 |
best answer
Shrilakshmi Raj
(CA)
(81 Points)
Replied 10 June 2010
Dear Baskar,
Does that mean, TDS Payable will not appear in Current Year?
Only the expense will be taken to Provision for exp.?
Harshil Akhani
(article)
(22 Points)
Replied 25 September 2011
Dear Bhaskar,
While thanking you for sharing your views, i somehow do not agree with your entries. As per TDS provision, TDS should be deducted when expense is booked (provision is also considered as booking of exp) or whenver paid, whichever is earlier. Hence TDS entry will come in current year.
Entries given by Sushant Singal is correct.
Regards,
Harshil
Ms Manvinder Kaur Kalra
(Partner)
(40 Points)
Replied 02 March 2012
Golden Rule is to understand the basis of provision created at year end. If basis is regular payments to a known party or Purchase order raised, than tds is deductable at the time of provision only that is before 31/3 even if vendor bill is not received by the deductor. If basis is ad hoc and party to be credited is clearly not known, than no tds is deductable at the time of provision of expense.
And in case of auditor, in case of companies, usually auditors for the next period are fixed in the relevent financial year only, so its remuneration is also very clear at the time of provision, so tds is deductable at the time of provision of audit fee.
Sudharshan Rao
(Accountant)
(21 Points)
Replied 17 October 2015
Debit - Audit Expeses A/c (1000)
Credit - Provision for Expenses \ Audit Expeses Payable A/c (1000)
In next year, after invocie receipt from vendor
Debit - Provision for Expenses \ Audit Expenses Payable A/c (900)
Credit - TDS Account (90)
Credit - Vendor Account / Creditors Account(810)
balance in the provision account is 100 and need to make the provision for 1000 more.
(if we have received invoice for partial amount, for the next year also we have to make the provision then how we have to account the old remaining provision balance and new provision)
Nimesh Kookani
(Accountant)
(42 Points)
Replied 07 January 2016
Previous Year
Audit Fees Dr. (Exp for the relevant year) 100
To ABC & CO. Auditors(under Current Liability- Accrued Liability/Prov. for Exp) 90
To TDS Payable (Under C.L. - Duties & Taxes) 10
Next Year,
TDS Payable (Under C.L. - Duties & Taxes) 10
To Bank A/C 10
ABC & CO. Auditors. 90
To Bank A/C 90
After return filed, give TDS certificate of that 10 as deposited in ABC & Co's. PAN Account.
sunil
(Sr. Accountant)
(38 Points)
Replied 07 January 2016
DR Audit Expenses 30000/-
Cr Tds on Profession 3000/-
Cr Auditors Head 27000/-
sunil
(Sr. Accountant)
(38 Points)
Replied 07 January 2016
DR Audit Expenses 30000/-
Cr Tds on Profession 3000/-
Cr Auditors Head 27000/-
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