Provision on telephone expense

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 June 2013 How to make provisions at the year end on telephone expenses?Bill period was march but bill liability was confirmed at the April end.If estimation is applied ,then what will be the treatment of difference.

Ganeshbabu K

Ganeshbabu K (Expert)
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26 June 2013 1)you might have received bill for the usage in march now already

pass provision entry in previous year ending date with bill amount

31st march 2013 Telephone charges
to provision for expencs

(being provision made for march telephone expences)

Reverse the same as and when you received the bill in next year

bill date provision for expences a/c
to telephone charges

(being provision reversed..)

Thanks & regards
Ganesh babu k

Querist : Anonymous

Querist : Anonymous (Querist)

26 June 2013 Dear Sir,

Please solve the query-

Telephone bill period 17/2/13 to 18/3/13.Bill due date 5th April. Provision was not made at the march. Auditee replied that this is not a prior period items because bill due on April and no need to make provision.Is this a correct accounting practice.

Ganeshbabu K

Ganeshbabu K (Expert)
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26 June 2013 1)THAT IS WHY I HAVE SAID IN ABOVE REPLY

Expense for the period f.y. 12-13 is to be booked in f.y.12-13

due date means when they have to pay..

he need to book expenses in accrual basis ..

if he don't accept record your observation and inform to your boss on final review he will teach to auditee..what to do

Thanks & regards
Ganesh babu k

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