Save Rs 588 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Adustment of provision account balance

Save Share

This query is : Resolved

Bittal.Adesara (Querist)
Follow

17 March 2010 We have made provision for expenses in the previous year 2008-09 for the expenses to be incurred in the current year 2009-10 of previous year.Now if all expenses of previous year adjusted against provision for exp in the current year 09-10.my query is if balance exists in the provision for exp account in the current year 09-10 then what is accounting entry to adjust the balance?

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
Follow

17 March 2010 There are chances that the amount as per actual bills is more or less as compared to ad-hoc provisions made in the previous year. Shortfall may be booked as expenses in the current year while the excess may be reversed to the profit and loss account. If the difference is material then the same may be classified as Prior Period Items.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now