Utility bill entry

This query is : Open

Vijay Mishra (Querist)
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12 June 2021 Dear Sir,

Suppose we get an electricity bill dated 8th April 2021 of our office for the period 07/03/2021 to 06/04/21. How should we pass this entry into our books of accounts ? Whether it should be divided into expenses payable / prior period expense or should we enter as current year expenses.

Look forward for your advice.

With best regards,

Vijay

CMA Poornima Madhava

CMA Poornima Madhava (Expert)
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12 June 2021 Provision can be made in respect of expense for the period from 07/03/21 to 31/03/21 and the rest can be accounted as an expense during the CY. However, if the value of the bill is trivial, provision can be made for the entire bill value in March itself and the payment can be accounted as and when made.