Provision entry

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Pramod A.T. (Querist)
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24 April 2012 I got electristy bill from 21.03.2012 to 17.04.2012, but year ending as on 31.03.2012. now I would like book entries in current date. there are necessory to make a provision
in last year. if yes, please explain.
eg.
Electristy bill for period 21.03.12 to 17.4.12. Bill Amt Rs. 12000/- how to take it entry on 31st march & in on current date. pls help..

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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24 April 2012 Calculate the electricity bill for 21.3.12 to 31.3.12 and provide the provision on 31.3.12 and balance you book at current year

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Pramod A.T.

Pramod A.T. (Querist)
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25 April 2012 Thank you sir.
I take entry as follows:

on 31.03.12
Electrisity Charges Dr. 4714
Provison for Exp. Cr. 4714.

&

current Year I passed JV.

Elec.Charges Dr. 7286
Provision for Exp.Dr. 4714
Party A/c Cr. 12000.

Is it right or wrong.
kindly advise.

CA Rakesh Goenka

CA Rakesh Goenka (Expert)
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25 April 2012 yes your entry is right but big organisation in these kind of cases they record the expenses with full amount when they received the bill.. they don,t create any provision,. n and also don,t consider these thing in prior period items okay...................

Ki$hor B

Ki$hor B (Expert)
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27 April 2012 Pramod, entry is correct and this is exactly the way we record in our company the only diff being the amount is estimated based on the previous 3 bills until the exact amount is known.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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03 May 2012 Total Bill divided by the number of days and multiply with the number of the days up to 31.3.2012 and provide the same in 2011-12 and balance in 1012-13

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