Tds deduction entry can be made through
A. Payment Voucher
B. Journal Voucher
C. Receipt Voucher
D. All of these
Answer» B. Journal Voucher
The correct answer is B. Journal Voucher.
A Journal Voucher is used to record various types of accounting transactions, including TDS (Tax Deducted at Source) deductions. It is a primary tool used by accountants to maintain accurate and systematic records of financial transactions. When it comes to TDS deductions, using a Journal Voucher is the most appropriate and accurate method. Here’s why:
Journal Voucher:
A Journal Voucher is a versatile accounting tool that allows the recording of a wide range of transactions. It is commonly used to make entries for TDS deductions because it provides a clear and comprehensive record of all transactions related to TDS. By using a Journal Voucher, you can easily track and analyze TDS deductions over time.
Now, let’s explore the other options and explain why they are incorrect for TDS deduction entries:
A. Payment Voucher:
While a Payment Voucher is used to record payments made, it is not suitable for TDS deduction entries. A Payment Voucher primarily focuses on documenting the outflow of cash or other forms of payment to settle liabilities. It is used when you make a payment to a vendor or supplier.
TDS deduction is not a payment made to an external party; rather, it is a statutory obligation enforced by the tax authorities. Hence, using a Payment Voucher for TDS deduction entries would not accurately reflect the nature of the transaction.
C. Receipt Voucher:
Similar to a Payment Voucher, a Receipt Voucher is used to record incoming cash or other forms of receipts. It is primarily used when you receive payment from customers or other sources. TDS deduction, on the other hand, is not a receipt of funds but a liability created to meet tax obligations. Therefore, using a Receipt Voucher for TDS deduction entries would not be appropriate.
D. All of these:
While TDS deduction entries could involve payments and receipts, considering all the options (Payment Voucher, Journal Voucher, and Receipt Voucher) as correct is not accurate. Each voucher type serves a specific purpose, and when it comes to TDS deductions, a Journal Voucher is the most suitable choice.
In summary, a Journal Voucher is the correct option for making TDS deduction entries. It provides a comprehensive record of the transaction, allowing for accurate tracking and analysis. Payment Vouchers and Receipt Vouchers are not suitable for TDS deduction entries, as they focus on cash outflows and inflows respectively, whereas TDS deductions are statutory obligations rather than payment receipts.
Therefore, it is important to choose the appropriate voucher type for each specific accounting transaction to ensure accurate financial records.
MBA,BBA.
I am Smirti Bam, an enthusiastic edu blogger with a passion for sharing insights into the dynamic world of business and management through this website.
I hold a MBA degree from Presidential Business School, Kathmandu, and a BBA degree with a specialization in Finance from Apex College,
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