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Provisions

sanjeev (Assistant manager) (28 Points)

05 August 2014

advances given to vendor against some work.provision against expense has been booked.but 2 year has been passed away but invoice not received from vendor.and now I book this advance under provision for bad debt.here I observe that two time p&l account debited.is it right or some other treatment need to be done.

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CA R SEETHARAMAN (CA Practice ) (143192 Points)
Replied 05 August 2014

If the vendor has done the work for which provision for expense has been made and only invoice is not received, adjust the advance agaist provision for expense and not to crate any provision for bad debt. If the vendor has not done the work reverse the provision for expense. By doing this your P&L will not be debited twice.