Shivani (Learner) (1881 Points)
14 December 2013Dear Members
X Ltd. normally gets a telephone bill between the range of Rs. 2000 to Rs. 3000 p.m.
Now for the month of March, it has yet to receive the bill which it will normally receive in April.
Telphone bill is related to March which will come in April and X Ltd. also doesnt know how much bill will come.
What journal entries shall X Ltd. pass in the month of March?
Regards
Shivani
Anirudh
(student)
(42 Points)
Replied 14 December 2013
Dhanasekaran D
(Intern at R S & Co Chennai)
(193 Points)
Replied 14 December 2013
I think businesses normally, to close their books, take around three to four weeks time... so when the recieve the bill within 10th of april... they will pass an back dated expense booking entry (companies normally can pass back dated entries), for which only few are authorised in case of ERP systems... like entry date in books can be actual entry date say 10th april in this case posting date will be 31st march telephone expenses a/c dr. (actual) to service provider a/c....... (actual) and the payment entry will be Date: actual date of payment service provider a/c dr (actual) to bank a/c........................(actual)
if the bills are recieved before filing monthly returns... then the credit can be taken for march... else on the next month only... for VAT we can take input tax credit within the financial year or within six months from the date of transaction, whichever is later.... for service tax, The CENVAT credit in respect of input service shall be allowed, on or after the day on which the invoice/bill/ challan, is received by the service recipient. After availing/taking the credit as above, the service recipient is required to make payment of value of service along with the service tax mentioned on such invoice/bill/challan within three months from the date of issue thereof, otherwise the credit is required to be reversed. In case the said payment is made later, the assessee can take credit with respect to such payment at that point in time. In case input service tax is paid on reverse charge basis, CENVAT credit for such service is allowed on or after the day on which payment of the value of input service and the respective service tax is made...(ref: cenvat credit rules) hope you are satisfied... post your replies...
Kiran B Chand
(Student)
(28 Points)
Replied 14 December 2013
Dhanasekaran D
(Intern at R S & Co Chennai)
(193 Points)
Replied 14 December 2013
Dear Kiran b Chand,
With regard to accrual concept only, back dated entry is passed...
We can't close our books for the year exactly on 31st of march... it wil take time because of these kind of transactions...
Regards.
ashok vijay
(Service)
(34 Points)
Replied 14 December 2013
Dhanasekaran D
(Intern at R S & Co Chennai)
(193 Points)
Replied 14 December 2013
But in her query, we don't know the amount of transaction...
How will you pass an entry, to create liability...?
Jaya Sankar Kumar Veluguri
(Articles Student)
(51 Points)
Replied 14 December 2013
Sagar Verma
(article)
(24 Points)
Replied 14 December 2013
mahesh
(merchant)
(56 Points)
Replied 14 December 2013
Dhanasekaran D
(Intern at R S & Co Chennai)
(193 Points)
Replied 14 December 2013
Why the concept of provision comes immediately...only if we are not able to get the invoice before finilizing the books... then provision entries are needed...
Regards
aarav
(student)
(26 Points)
Replied 14 December 2013
chirag goel
(student)
(45 Points)
Replied 14 December 2013
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