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Accounting entries

sunny (Future CA) (30 Points)

21 July 2016

can somebody tell me .what will be the entry for the given case ? if we have received a service and has to pay rupees 10000 but didnt pay 10000 in whcih 5000 belongs to next year...what will be the entry this year

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8 Replies

Minesh Rawat (Article) (199 Points)
Replied 21 July 2016

expense a/c Dr 5000 Advance payment a/c Dr 5000 To Cash/Bank 10,000

1 Like

Ankita Chawla (CA Student + Graphologist + Accountant + Audit Assistant) (909 Points)
Replied 21 July 2016

As minesh said...right

By Expenses A/c [for which serv is recd] dr 5000

By Prepaid Expense a/c [under assets] dr 5000

To Cash/bank 10000

1 Like

Rahul Prasad (CA Student) (1683 Points)
Replied 21 July 2016

Please Clear one thing is 10000 paid this year if yes then above ans is right. nut u wrote didnt paid is matter of confusion is it mean did not paid ? Then only exp a/c dr 500, to o/s exp will be credited by 5000.

sunny (Future CA) (30 Points)
Replied 22 July 2016

No sir we did nt pay any expenses neither 5000 of current year nor a 5000 of next year we have just booked it.. I think 5000 which belongs to next year will come under accrued exp.. What do u say sir?

Rahul Prasad (CA Student) (1683 Points)
Replied 22 July 2016

Then what is need to book next year exp if not paid in advance this year. Is bill raised of rs 10000 this year ?

sunny (Future CA) (30 Points)
Replied 22 July 2016

Rahul Prasad (CA Student) (1683 Points)
Replied 22 July 2016

As per me then only 5000 of current year will be book. Next year exp which is neither accrued not paid is not required take in books of account.

Rinky Senger (_) (205 Points)
Replied 30 July 2016

If bill have received in the current year then 5000 should be booked for current year expense, 5000 as prepaid expense and party(service provider) should remain outstanding as you said payment has not been made.

If bill has not been received, then just create a provision for current year expense (i.e. 5000) only.