Expenses in accounts finalisation

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CA. Jyoti Baid (Querist)
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01 April 2010 Respected All,

A company is finalising its accounts for the year ended 2009-2010.

It has not received the telephone and electricity bills for the months of February and march.

What should the company do while preparing the balance sheet.

Can it show the amount of these two bills in the next financial year 2010-2011 and will these be allowed in income tax assessments in that year?

Regards,
Jyoti

kartik_somu

kartik_somu (Expert)
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01 April 2010 the company can make provision based on previous months bill and expected bill amount. in the next year it can reverse the provision and book the actual expense.

CA SANJAY MUKHERJEE

CA SANJAY MUKHERJEE (Expert)
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01 April 2010 Agree with expert.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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01 April 2010 AGREE

CA. Jyoti Baid

CA. Jyoti Baid (Querist)
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03 April 2010 Thank you for the reply.
But in the next year on booking the actual expenses of feb and march, will these exps be allowed in the next year in the income tax assessments.

For eg: In F.Y. 2009-2010,follwing entry will be passed on estimated basis:
P/L Account Dr. 25000
To Prov for expenses 25000
Will Rs. 25000 be allowed on provisional basis in F.Y. 2009-2010.

Next year:2010-2011, actual expenses- Rs.30000
Prov for expenses 25000
To P/L Account 25000

P/L Account Dr. 30000
To Expenses 30000

oR, rS. 30000 of F.Y. 2009-10 be allowed in F.y. 2010-11 on actual booking.

Please clarify.

Regards

CA Ashok Kumar Sahu

CA Ashok Kumar Sahu (Expert)
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03 April 2010 you can pass below entry:

In F.Y. 2009-2010,following entry will be passed on estimated basis:

Telephone & Electricity Account Dr. 25000
To Prov for expenses 25000

Rs. 25000 be allowed on provisional basis in F.Y. 2009-2010.

Next year:2010-2011, actual expenses- Rs.30000

Telephone & electricity 5000
Prov for expenses 25000
To Bank a/c 30000

Try to Make provisional entry excess of Actual amt. payable.

in F.y. 2010-11 Rs. 5000/- not allowed,

hence Try to Make provisional entry excess of Actual amt. payable i.e. 30000/-

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