Cash basis or accrual basis

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

09 January 2013 In my office I do all accounts on cash basis i.e. all payments of Dec to be paid at Jan and I make entry in Jan. But now I was told that all expenses for the month of Dec to be taken in Dec as Outstanding and then it is provided in Jan. So according to office Rent for Dec to be accounted for like:

Dec
Rent A/c...............Dr
To Outstanding Rent A/c

Jan
Outstanding Rent A/c
To Bank

I told office that I'd make this provisional entry in March. Then I was told to be confirmed whether taking all outstanding provisions in March only is correct process or not. So Please advise whether my accounting process is correct or wrong? Should I make all outstanding provision every month or only March is enough?

LOKESHA D A

LOKESHA D A (Expert)
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11 January 2013 yes dear what u have accounted is right,,,for o/s expenses like salary,rent & other repeated expenses we have to make a provision entry for the same month,,,,ex: for feb-12 month salary is paid on march-12 but we have to make a provision for this on feb last day....

Querist : Anonymous

Querist : Anonymous (Querist)

11 January 2013 No sir, I want to say if I pass provisional entries only 30th March and no provisional entries in other month, then is my process wrong?

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