Provision for exp

Plz guide me  how  provision for the month of March  will entred in accounts books regarding electricity exp & telephone exp.. when  actual bill are not recvd?

 

Replies (2)

dear sir ,

           If u can not received the actual invoice of telephone /electricity expenses than u make a provision on average basis (on the basis of last some months).

journal entry :-

 telephone /electricity expenses Dr                     .........

                     To provision for telephone/electricity expenses   ...............

 

Provision should be made on an average basis consiering the payment made during the year. When the bill is received in the subsequent year then th excess provision if any shud be sritten back to P&L and if short provision was made P&L shud be debited.

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