Multiple choice

ABC Traders paid a total of Rs. 40,000, by way of cheques, as Advance Tax during the year. On 31st March 2011, ABC Traders made a provision of Rs. 85,000 as the firm's tax. Which of the following entries need not be passed in the account book?

  1. Dr. advance tax and Cr. bank A/c.

  2. Dr. profit and loss A/c and Cr. provision for taxation A/c.

  3. Dr. provision for taxation A/c, Cr. advance tax A/c and bank A/c.

  4. Dr. income tax A/c and Cr. bank A/c.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

 No need to open Income Tax a/c for the payment of Income Tax.

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