accounting of matching concept

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$urendra kirodiwal (Querist)

14 December 2016 One govt company prepare monthly P&L account & doesn't record "security charges" in the month of October. But in P&L account of November record earlier exps as well as exp of November........ Does it affect matching concept..? Is it right or wrong...?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

14 December 2016 As per accrual concept of accounting, the expenses needs to be accounted in the period as it actually incurred. so the security charges need to be provided during OCT-16 itself

$urendra kirodiwal

$urendra kirodiwal (Querist)

14 December 2016 Can we apply this concept in monthly P&L account also...?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

14 December 2016 Yes. you can apply for monthly p&l a/c also

$urendra kirodiwal

$urendra kirodiwal (Querist)

14 December 2016 My clients co said that without giving bill by security contractar to us, we can't know the amount of security charges........ So I think they should made provision for it in the earlier month

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

14 December 2016 Yes, they should create the provision for the same once actual bill received the provision can be reversed or the adjust the expense according to the actual

$urendra kirodiwal

$urendra kirodiwal (Querist)

14 December 2016 Thanks a lot sir

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