I have a conceptual doubt. I am trying to solve a problem in IPCC Accounts chapter Non Profit Oraganization.
There is a expense in the payment side of Receipts and Payment A/c of Current Year : Audit Fees Rs 250.
There is also a Provision for Audit Fees standing at Rs 250 in the year ending Balance Sheet of last year.
The additional info at the end is : Provision for audit fees for the year is created Rs 300.
The doubt which I have is : Should we debit / credit the Audit Fee of Rs 250 appearing in the payment side of receipts and payments a/c of current year to the provision for audit fee. Or should we charge it to current year Income and Expenditure A/c.
I think we should debit it to Provision for audit fee but not sure.
Please suggest.
CAclubindia
