Banking companies

answered on 24-Apr-23 09:38

Interest and discount how it is 22,97

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Tqqq

Prasanna Ram

CA Inter

★ 0

6

253

Journal entry explanation for provision for tax

answered on 12-Jun-24 12:07

In this entry Profit and loss acc debit To provision for tax acc When provision for tax is a liability then how can it be transferred to a profit and loss account?need explanation behind this posting

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Provision for Tax: The provision for tax is an estimate of the tax liability that a company expects to pay for a particular financial period. It is a liability because it represents an obligation to pay the government in the future. Profit and Loss Account: The Profit and Loss (P&L) Account reflects the company's revenues and expenses for the financial period, ultimately showing the net profit or loss. Accounting Entry: Profit and Loss Account (Dr) To Provision for Tax Account (Cr) Recognition of Tax Expense: When the company incurs an expense related to income tax, it needs to recognize this expense in the Profit and Loss Account. This ensures that the tax expense is matched with the revenues of the same period. Creation of a Liability: The credit to the Provision for Tax Account creates a liability on the balance sheet. This liability represents the amount the company expects to pay in taxes. Example: Assume a company estimates that it will owe ₹50,000 in taxes for the financial year. Journal Entry: Profit and Loss Account Dr ₹50,000 To Provision for Tax Account ₹50,000 Explanation: Debit to Profit and Loss Account: This entry records the tax expense in the P&L Account, reducing the net profit for the year by ₹50,000. Credit to Provision for Tax Account: This entry creates a provision (liability) for the tax expected to be paid. It shows that the company has an obligation to pay ₹50,000 in taxes in the future. When the company actually pays tax - Provision for Tax A/c Dr. To Bank A/c In some cases the companies pay advance tax, in which case the entry would be Advance Tax A/c Dr. To Bank A/c Ultimately the provision for tax and advance tax account would be netted off.

Gokul Nath

CA Inter

★ 605

12

57K+

Redemption of Pref shares

answered on 23-Apr-23 20:05

Can anyone pls cross check the closing balance of profits here . I'm getting 100,000 rs

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Is correct only right?

Neha Baliga

CA Inter

★ 16K+

2

318

Memorandum account

answered on 23-Apr-23 19:48

What is a memorandum account?

latest answer

A rough account for calculation purpose

Punitha Krishnaraj

CA Final

★ 5K+

3

288

Revaluation reseve

answered on 23-Apr-23 13:54

when sale of fixed assets what the accounting treatment to be done?

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Debit bank a/c Credit asset a/c

Kamal Kumar

CA Inter

★ 7K+

1

298

AS 22

answered on 26-Apr-23 17:33

Is DTA added to p&l and DTL deducted from p&l

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Deferred Tax Asset results in a benefit and hence is reduced from tax expense and indirectly added to Profits and vice versa.

Angel Maria Varghese

CA Final

★ 9K+

1

241

As26

answered on 23-Apr-23 10:40

Why are advertisement and preliminary expenses considered as intangible assets under AS 26

latest answer

It deals with but you cannot recognise it as an asset as peR AS 26

GIRISA S

CA Inter

★ 390

3

235

Promotional gift received accounting

answered on 22-Apr-23 13:01

If a company receive 100 units of inventory free with its purchase by the supplier as a promotional gift so does it is recorded as gain/income in p&l or just decrease the cost of each unit (deflat the cost of each unit)

latest answer

Reduce the cost per unit.

Atharv Sankliya

CA Final

★ 3K+

1

214

Doubt

answered on 22-Apr-23 13:02

Why salvage value is not deducted in diminishing balance method

latest answer

It is deducted to calculate the rate. Once rate is calculated you will apply the rate on the carrying amount.

Chandramouli A

CA Inter

★ 720

1

223

Account of credit

answered on 22-Apr-23 06:36

Suppose in a shop my account is there(credit) i gave advance money to shopkeeper what will be the entry?? Will it be treated as advance received or not??

latest answer

Yes it's treated as adv received... u will be treated as liability

Prathmesh kharul

CA Foundation

★ 3K+

1

272