Provision

This query is : Resolved

SHIRAS (Querist)
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04 March 2011 i was made a provision for audit fee Rs. 20,000. but auditor given a bill(Fee) Rs. 18,000. my first entry is

Audit fee Exp. Dr 20000
To Prov. for Audit 20000

then what is entry for Rs. 18000.
I think entry would be

Prov. For Audit fee Dr. 20000
To Bank 18000
To Adj. for prov. (P/L A/c) 2000

JIGAR DALAL

JIGAR DALAL (Expert)
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04 March 2011 If Provision is for F.Y. 2009-2010, then entry will be

Prov. for Audit Fees Dr. 20000
To Reserve & Surplus Cr. 2000
To Auditor's A/c Cr. 18000

While making payment

Auditor's A/c Dr. 18000
Bank A/c Cr. 18000

If PRovision made in this current F.Y. 2010-11 @ half year ended on 30.09.2010 then

Prov. For Audit Fees Dr. 20000
Audit Fees Cr. 2000
Auditor's A/c Cr. 18000

SHIRAS

SHIRAS (Querist)
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05 March 2011 I provide provision for Last FY (2009-10). Why the extra amount will going to Reserve & Surplus A/C . and further this a/c how it can be close.

then you are talking about Current FY. If Audit Fee will credit. this audit fee is an Ind.Expense in Tally right. And auditors a/c it is also an expense or Current liability. kindly reply

JIGAR DALAL

JIGAR DALAL (Expert)
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07 March 2011 Last year (2009-10) you have made provision for exps. for Rs.. 20000/-, while actual exps. is Rs. 18000/- hence you have booked excess exps. in last year. Any reversal entry of last year expenses will be debited or credited to Reserve & Suplus A/c as last year's profit & loss is reflected in Res. & Surplus.

Auditor's A/c is Shown as sundry creditors under current liabilities in balance sheet