28 August 2010
Please pardon my English and accounting knowledge:
I have two Types of indirect expenses, related to current year, but that will only due next year (not Bad Debts & Discounts, and first one repeats every year and second one only once and no more).
I can’t calculate the exact amount of these expenses right now.
Do I have to make any provision/out standing a/c in current year to meet these expenses? Then how I assume the volume of provision?
What are the entries to be made in current year and next year of account books up to the payment of these expenses? After the payment, if any excess/short in provision a/c, what will be the entries to clear it?
29 August 2010
according to AS 1, MATCHING Concept, the revenue and expenditure should match with its related period, here u have to make a provision, lets take an example - 1. rent 10000 for the month of march 2010 will be paid in in April, CURRENT YR - Rent dr 10000 to o/s rent 10000
next year(wen the payment is made) - Bank dr 10000 to o/s rent 10000
CAclubindia
