how to pass entry for VAT return adjustment entry?
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Answer / leaner
VAT Adjustment includes calculating a Set Off of Tax Payed
and Tax Received from Purchases and Sales respectively.
VAT = Output Tax - Input Tax.
If Input Tax (Tax on Purchase) is more than Output Tax (Tax
on Sales), the difference is carried forward to the next tax
period.
Eg:Purchased Taxable Goods for 25000 and Tax paid is 1000.
Sold goods worth 35000 (in this case assuming opening stock
exists) and Tax received 1400
Output Tax A/c Dr. 1000
Input Tax A/c Cr. 1000
(Input Tax is transferred to Output tax to claim a Set Off)
Output Tax A/c Dr. 400
VAT (Payable) A/c Cr. 400
Final VAT entry would determine whether Tax is Payable or
Refundable as the case may be.
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Answer / vivek
when vat payable seen or output vat exceed then input vat, the entry will be:
first,
Dr. output vat a/c
Cr. input vat a/c
Cr. Vat payable a/c
second,
Dr. vat payable a/c
Cr. cash / bank a/c
when vat refundable seen or output vat lower then input vat, the entry will be:
Dr. output vat a/c
Dr. vat adjustment a/c
Cr. input vat a/c
(entry pass end of the month mean which month you see the report, entry pass always "journal mode")
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