Can amount be paid when the liability is itself not booked
Ajit kumar Dubey (Taxation Manager) (637 Points)
11 July 2012Ajit kumar Dubey (Taxation Manager) (637 Points)
11 July 2012
Ankit Mehra
(Service)
(176 Points)
Replied 11 July 2012
When anythin has not accrued then how come liability will arise dear.. this payment to which you are callin as pre-payment will be treated as advances as of now..
CA Ganesh Agarwala
(Audit Senior Manager)
(239 Points)
Replied 11 July 2012
dear ajit,
as far as your query is concerned, yes you can pay off the liability before it accrues to you. but for that you have to show the amount paid in advance accont and later you can adjust such advance with the liabilty on its accrual.
cheers
ganesh agarwala
Ajit kumar Dubey
(Taxation Manager)
(637 Points)
Replied 11 July 2012
Ajit kumar Dubey
(Taxation Manager)
(637 Points)
Replied 11 July 2012
Archana Das
(CA Final student)
(622 Points)
Replied 12 July 2012
Originally posted by : Ganesh Agarwala | ||
dear ajit, as far as your query is concerned, yes you can pay off the liability before it accrues to you. but for that you have to show the amount paid in advance accont and later you can adjust such advance with the liabilty on its accrual. cheers ganesh agarwala |
there is no violation of AS
Zuzer Shabbir Singapury
(Employee)
(27 Points)
Replied 16 August 2012
Any payment made before service/liability incurred/provided it is to treared as advance, show it as Supplier advance.