Question about the books of account of the company and other entities. The company was following the Financial Year April to March. Why does the provisional expense entry in the company books in March? The date of the bill is in April and the expenses have been booked in the month of March. I know what the expenditure is in the relation of the month of March. But I am having this question repeatedly in mind. Is there any income tax act behind this?
17 May 2019
No income tax behind this. It's the principle of accrual basis of accounting. For the services provided in March bill will be received in April(rent,elecricity, telephone Etc.) but expenditure has to be booked in March.
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