01 April 2010
the company can make provision based on previous months bill and expected bill amount. in the next year it can reverse the provision and book the actual expense.
03 April 2010
Thank you for the reply. But in the next year on booking the actual expenses of feb and march, will these exps be allowed in the next year in the income tax assessments.
For eg: In F.Y. 2009-2010,follwing entry will be passed on estimated basis: P/L Account Dr. 25000 To Prov for expenses 25000 Will Rs. 25000 be allowed on provisional basis in F.Y. 2009-2010.
Next year:2010-2011, actual expenses- Rs.30000 Prov for expenses 25000 To P/L Account 25000
P/L Account Dr. 30000 To Expenses 30000
oR, rS. 30000 of F.Y. 2009-10 be allowed in F.y. 2010-11 on actual booking.
CAclubindia
