Hi,
If there is a debit balance in an account, which is in the nature of advance given to a person(No sales affected) and which i outstanding for many years, hence not recoverable. What is the entry to be passed? and what would be the implication of the same for Tax purposes. plzz specify which section of IT Act to be referred.
Plzzz clarify
it will taken to income
ntry will b
Dr. P/L A/c
Cr. Advance to customer
in tax also it will be taken as income
It will nt be income...but an exp..bal w/off.
rajesh ans is right one
| Originally posted by :Rajesh | ||
| " |
Dear Atif
But than when i gave the advance to the party it was never routed through P&L A/c. How can i charge this to P&l A/c as this has the impact of Reducing my profit. Plzz clarify which section of IT Act will be applicable. |
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| Originally posted by :Guest | ||
| " | Originally posted by :Rajesh " Dear Atif If there is any unrecoverable balance lying in debtors account then you should be debit 'sundry balance return off A/c and credit the customer. As the entry appeared in P/L A/c it will impacted on profit also as well as tax. But than when i gave the advance to the party it was never routed through P&L A/c. How can i charge this to P&l A/c as this has the impact of Reducing my profit. Plzz clarify which section of IT Act will be applicable. " You are confusing the transaction. If it is a debtor, what have you paid to them? |
" |
| Originally posted by :Atif | ||
| " | Hi, If there is a debit balance in an account, which is in the nature of advance given to a person(No sales affected) and which i outstanding for many years, hence not recoverable. What is the entry to be passed? and what would be the implication of the same for Tax purposes. plzz specify which section of IT Act to be referred. Plzzz clarify |
" |
Can anybody tell me what should be the policy of amount to be written off in case where there is old credit balances of debtors i.e. advance received from debtors
CAclubindia
