Sharad Saini (Student) (286 Points)
01 June 2010Hi
A company receives various bills like electricity or telephone etc for March to April. Now should the company provide for exp related to march as provision or book expense(half portion).
and imcome tax implication of this expenses.... whether this half portion would be allowed
This is usually igored but sometime it may be of large amount if size of company is big or it is having offices at many places.......
GAURAV JAIN
(C.A. F!N@L Group-1 Clear...)
(278 Points)
Replied 01 June 2010
it can be considered as event occuring after the balance sheet date and it is adjusted event
Ankit CA and CS
(Manager - Accounts)
(204 Points)
Replied 01 June 2010
See for march comapnies provide a general liabilities, electriucity on the basis of last month payout basis and book expenses accordingly and also wat happens some times some comapnies hav a facility of posting backdated entries in their system so they initially make provision and subsequently on receipt of actual bill book the actual amount...
Prasad R
(CA Final)
(2128 Points)
Replied 02 June 2010
I'll suggest u to if the billing period is march- april. proprtionately show the expenses for half month and make a provision for the remaining half month. U may then reverese the provision in the subsequent month.
Best Wishes
Prasad R
Kalpesh Chauhan,
(Tax Assistant (Accounting Technician CA FINAL CS PROF. PROG. B.Com))
(8311 Points)
Replied 02 June 2010
CAclubindia
