Telephone expenses

Hello,

1. You can simply create a payable account.

Telephone Bill a/c Dr 2500
To, Telephone Bill Payable a/c Cr 2500

2.When you actually paid:

Telephone Bill Payable a/c Dr 3000
To, Cash a/c Cr 3000

If you have taken Rs. 2500 as payable but Rs. 3000 has actually been paid, then you can pass the above entries.

The difference in the Telephone Bill Payable a/c can be written off to P & L a/c

Regards,
Subhash.

Dear Subhash

I dont think your entries are right.

When we make an expense due, we debit the expense and credit the liability account.

You mentioned the opposite.

Also you didnt tell by what amount the due entry to be created.

We dont know how much telephone bill of March will come in April.

shivani

Mr. Subaash, Your entries are not correct...

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)

I hope this clears your duoubt,... if not please post your reply mam...

Yeah I am extemely sorry for the mistake.

I have edited my reply. Sorry!

Dear Dhanasekran Sir

What about the service tax component?

Suppose X Ltd. is registered with Service Tax.

Further suppose bill of Rs. 3000 plus service tax 12.36% comes on April 10.

Now when shall X Ltd. claim input service tax on 31st March or on the date of payment?

Shivani

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...

Please give example for the following telephone bill provision to be made in March 20. Bill dated 1.4.2020.

Telephone rental - Rs 11684.48

Input CGST           Rs   1051.61

Input SGST            Rs  1051.61

Total bill                  Rs 13787.70

How to make provision entry as of March?