Accounting Entry Example 7: Prepayment with Excise not part of Withholding Calculations
This scenario assumes:
-
Prepayment: 10000.00 INR
-
Regular Voucher:
-
Merchandise: 8000.00 INR
-
Tax: 988.80 INR
-
Prepaid Voucher
Accrual (voucher posting):
| Description | Account | Debit | Credit |
|---|---|---|---|
|
Prepaid Expense |
122000 |
10000 |
N/A |
|
Accounts Payable |
200000 |
N/A |
9800 |
|
Withholding Liability |
203100 |
N/A |
200 (2% of 10000) |
Payment (payment posting):
| Description | Account | Debit | Credit |
|---|---|---|---|
|
Account Payable |
200000 |
9800 |
N/A |
|
Cash Distribution |
100000 |
N/A |
9800 |
|
Withholding Liability |
203100 |
200 |
N/A |
|
Cash Distribution |
100000 |
N/A |
200 |
Applied Regular Voucher
Accrual (voucher posting):
| Description | Account | Debit | Credit |
|---|---|---|---|
|
Expense Distribution |
500000 |
8000 |
N/A |
|
Accounts Payable |
200000 |
N/A |
8828.80 |
|
Withholding Liability |
203100 |
N/A |
160 (2% of 8000) |
|
Cenvat |
204500 |
988.80 |
N/A |
Prepaid Reversals:
| Description | Account | Debit | Credit |
|---|---|---|---|
|
Accounts Payable |
200000 |
7840 |
N/A |
|
Prepaid Expense |
122000 |
N/A |
8000 |
|
Withholding Liability |
203100 |
160 |
N/A |