LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Invoice issued in advance

lalit garg (no) (45 Points)

24 November 2015

hi,

Suppose I have received an invoice for expenses due in next year and payment is not made against this invoice in current year.

Advise me accounting entries regarding above in my books?

Reply
Follow
Share

9 Replies

Piyush Tanwar (Assistant Manager - Accounts) (1432 Points)
Replied 24 November 2015

Expenses A/c --- Dr

To Provision for Expenses A/c

lalit garg (no) (45 Points)
Replied 24 November 2015

How can we debit the expenses account in P&L because the expenses are related to next year

SMd Mohaseen (professional) (44 Points)
Replied 24 November 2015

No need to make entries in Current Year. To be made only when the expenses are due or paid in Current year.

CA Prakhar Jain (Partner at Jain M Prasad & Co) (710 Points)
Replied 24 November 2015

No entry By the way, can you give an example of when such a situation arises practically. I don't think any invoice is raised where neither goods/services provided nor payment required to be made.

yogesh T G (accountant) (40 Points)
Replied 24 November 2015

Please write question with proper example

G B S KALYAN KUMAR (Dy Manager - Finance) (24 Points)
Replied 24 November 2015

Prepaid expenses a/c Dr To Vendor A/c (Being expenditure for future period accounted) Pay as per payment schedule and write off expenditure in respective Accounting period.

lalit garg (no) (45 Points)
Replied 25 November 2015

Example :

We have a company A ltd.

B Ltd. issued invoice of rs 4000 on 10-10-2015 for services to be given for the period 10-10-2015 to 10-10-2016. No payment made to B.Ltd till 31-12-2015.

tell me the accounting treatment for the financials ending on 31-12-2015.

this is happening in real

lalit garg (no) (45 Points)
Replied 26 November 2015

Example : We have a company A ltd. B Ltd. issued invoice of rs 4000 on 10-10-2015 for services to be given for the period 10-10-2015 to 10-10-2016. No payment made to B.Ltd till 31-12-2015. tell me the accounting treatment for the financials ending on 31-12-2015. this is happening in real

Mohammad Adil (Accountant) (64 Points)
Replied 23 December 2015

Entry as on 31.03.16

service exp a/c dr

To service exp payble

Note:- if payment not made till the financial year ends then calculate the amount of exp which is related to current financial year and then book the exp at the end of the financial year 31.03.16 ( 4000/365,*no.of days)