09 July 2014
When I make provision for expense at year end the balance should reflect just the which will be clubbed with the opening provision so the balance will be nil.
eg: electricity bill period is suppose 15th march to 15th april is Rs. 1000 /- so I make 15 days provision for march Rs. 500/- in the year end 31/3/2014 and balance Rs. 500/- for april 15 days I pass the entry in next year and the total of the two will be equal to Rs, 1000 /- the amount paid and will be nil. but in my books due to excess paymentits showing debit balance what to do please help
23 July 2014
entry must be ass following say your expenses estimated 500 for 15th mar to 31st mar. Electricity exp dr 500 To Outstanding Liability 500 (provision made for 15th mar to 31 mar)
you received bill of 1000/- on 15th apr. you have to pass
Electricity exp 500 (1 apr to 15 apr) Outstanding liability ac 500 Dr To Party 1000
remember you have to pass only that much amount in OL a/c which you made provision, if actual bill is more than or less than your estimation, diff to be charge in expenses a/c.
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