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Provision entry of electricity bill etc

Muhammad Arshad Ashrafi (Accountant) (189 Points)

30 April 2011

Dear All

I need your valuable help

I want to khow about provision entries in a/c on 31.03.11

any criteria for provision entry of electricity billing date or bill issue date

the same thing in telephone bills also as above

for example as below

1.) electricity bill date 26.03.11 bill paid on 08.04.11

2.) landline bill date 06.04.11 billing period 05.03.11 to 04.04.11 bill paid on 29.04.11

can i pass provision entry of electricity bill payable & telephone bill payable on 31.03.11 ????

thank in advance

arshad

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14 Replies

(Guest)

yes you can pass electricity and telephone bills payable ac. on 31-03-2011

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Muhammad Arshad Ashrafi (Accountant) (189 Points)
Replied 30 April 2011

Thanks for reply Dear Radhekrishna ji

i want to khow the criteria of provision entries in a/c, means with type of expenditure, and amount criteria also

thanks

arshad

Devendra (Chartered Accountant) (4775 Points)
Replied 30 April 2011

There is no criteria as such in Provision entries. Actually the expenses pertaining to the previous year which are paid in the next year need a provision in the books. If no provision is made, then the expense will be disallowed in the year in which the payment is made (disallowed under Prior Period Exps.). Provisions are must, when the Assessee follows mercantile system of accounting.

Regards,

Devendra

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Muhammad Arshad Ashrafi (Accountant) (189 Points)
Replied 30 April 2011

Thanks Devendra ji for answer

Arshad

(Guest)

no criteria you can also create it as estimated by you according to previous year bills

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Muhammad Arshad Ashrafi (Accountant) (189 Points)
Replied 30 April 2011

THANKS RADHEKRISHNA FOR ANSWER

ARSHAD

C.A.M.S.ROY (C. A.) (478 Points)
Replied 02 May 2011

If u follow mercantile system of accounting u need to make a provision for such exp in the year to whichits related,in such a case entry will be Deited to relevant exp A/c, and Credited to expenses Payable A/c.

But if u follow the cash basis of accountind such exp will be allowed in the year in which it is paid.

Ravishankar K (Accountant) (461 Points)
Replied 03 May 2011

can you kindly explain the entry,,,

on 31 mar 2011 i made entry

telephone expenses ac dr --- 1500rs

provision for telephone expenses ac cr --- 1500 rs

and on 10 april i recd the telephone bills worth 1200/- kindly explain what the entry should be?

should i modify the journal entry made on 31-3-11 to Rs.1200 Rs. or shall i create a provision only after i receive the actual expenses, because i dont think so there will be any company who closes accounts on exact 31 mar, guess many companies make backdated entries, and is it good to make backdated entries, many times i make lot of backdated entries, so only after receiving tel bill can i make the amount of rs.1200 as provision?

Tarun Arora (m.t) (33 Points)
Replied 14 June 2011

we should

Electricity expenses a/c dr

To Provision for electricity cr

and at the end of month

Provision for electricity a/c dr

to Bank a/.c

sumit (c.a student) (104 Points)
Replied 16 June 2011

i understood that entry,,but

then in p&l

why directly it appears on debit side provision for expenses

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Tarun Arora (m.t) (33 Points)
Replied 16 June 2011

Originally posted by : sumit

i understood that entry,,but

then in p&l

why directly it appears on debit side provision for expenses

Dear Mr. Sumit

The computer expenses would come in P& L

and Provision for expenses would come and Balance sheet

Syed Jamal Haider Zaidi (Accountant) (33 Points)
Replied 25 June 2012

Some one can please help me for the below mentioned service tax treatment:-

An overseas company “A” incorporated Australia and having various customers (Debtors) in India,

an another company “B” incorporated in India collects all the Indian debtors of overseas company “A” on commission basis, and issue commission invoice to overseas company “A” outside India, now question arise

whether commission basis services provided, have to be considered EXPORT SERVICES
it also make sure the company B issue invoice to overseas company A in Australian currency,
it also clear that company B providing commission basis services in India.

Required help with the provision of Service Tax Act and with decided case.

Regards

J.H.Zaidi

shahyar husain (1240 Points)
Replied 10 November 2020

Hi! Through following the below discussed procedure, provision entry of electricity bills can be done. 1. Create a Supplier – Electricity Payable – if already created fine 2. Enter AP Invoice – Debit Expense and Credit Payable for the provision and validate / account it. 3. Transfer the AP invoice to GL 4. Run the AP Trialbalance for balance checking for payable account 5. Also Run the GL Trialbalance and check the AP Liability balance whether in sync with the AP balance.