Provisions creation against purchase order
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
02 June 2012
the purchase order is prepared but the bill is not available as on 31st March'12. whether provision has to be created for the aforementioned amount. such PO is towards purchase of Computer Equipment out of the fund sanctioned by AICTE towards MODROB Grant and the amount of PO is Rs. 788000/-.
02 June 2012
As per your query, it is found that purchase order is made. There may be type of cases: either advance is given and advance not given. we can treat the advance in the Capital work in progress with the detail of PO.The mention of the grant and sanction be made in the notes to accounts of final accounts
Querist : Anonymous
Querist :
Anonymous
(Querist)
02 June 2012
how it can be classified as capital work in progress?
and as it is towards purchase of computer equipment can we pass the entry as Computer Software to be debited and the party against whom the PO was issued credited
one more thing that the advance was not given only the order was placed with the party-now what will be the accounting treatment in this scenario?
and as it is towards purchase of computer equipment can we pass the entry as Computer Software to be debited and the party against whom the PO was issued credited
one more thing that the advance was not given only the order was placed with the party-now what will be the accounting treatment in this scenario?
02 June 2012
I'd agree with the view of Phuljit, better to mention as notes.
However, consider these 2 possibilities:
If the eqpt. has been delivered by the vendor but the bill has not been submitted in Accounts deptt., then make the provision.
If no material is received as on the BS date, then better not pass any entry and follow the view as given by Phuljit.
However, consider these 2 possibilities:
If the eqpt. has been delivered by the vendor but the bill has not been submitted in Accounts deptt., then make the provision.
If no material is received as on the BS date, then better not pass any entry and follow the view as given by Phuljit.
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