| Originally posted by :KARTHIKA |
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I have a doubt in my client office they receive telephone bills for the period like 10.03.09-9.04.09, so far they have made only one journal to book the expense, but during the close of the books can they apportion march month expense in march and april month expense in april month like apportioning expenses for respective month? But usually clients post entries on the basis of 1 for 1 i.e. booking journal at the month end and corresponding payment at the date of payment say at beginning of the next month!!! which would be more correct??? |
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Hello Karthika
You can apportion the amount in March and April proportionately if the telephone bill period may be eg. 10/03/09 to 09/04/09
Entries: Tel Bill Say Rs. 3100
Date 31/03/2009
Telephone Exp A/c Dr Rs.2200 (22 days for March and 9 days for April)
To Provision for Exps. A/c Cr Rs.2200
And on payment of telephone bill in April 2009
Entry will be
Telephone Exps A/c Dr Rs. 900
Provision for Exps A/c Dr Rs.2200
To Bank A/c Cr Rs.3100
This is case the user (date entry operator) has always to keep a track to divide the amount proportionately as per days.
As per my view I always preferred the second option as mentioned below:
If the Bill period comes between two months like 10/05/09 to 09/06/09 or 10/03/09 to 09/04/09 etc. then user can pass the entry as follows
Bill Period 10/05/09 to 09/06/09
Entry : Telephone Exps a/c Dr Rs.3100
To Bank A.c Cr Rs.3100
This entry can be passed for all 11 months upto Feb
But when in comes to March then the User has to pass entry as follows
31/03/2009
Telephone Exp a/c Dr Rs.3100 (With full bill value. Do not apportion)
To Provision for Exp Cr Rs.3100
On Payment Date say 24/04/2009
Provision for Exps Dr Rs.3100
To Bank A/c Cr Rs.3100
This will help the user to track the outstanding liabilities with paid yet easily
Hope you got the answer.
Dear friends please clarify me if I am wrong.
CAclubindia
