Suppose we get an electricity bill dated 8th April 2021 of our office for the period 07/03/2021 to 06/04/21. How should we pass this entry into our books of accounts ? Whether it should be divided into expenses payable / prior period expense or should we enter as current year expenses.
12 June 2021
Provision can be made in respect of expense for the period from 07/03/21 to 31/03/21 and the rest can be accounted as an expense during the CY. However, if the value of the bill is trivial, provision can be made for the entire bill value in March itself and the payment can be accounted as and when made.
CAclubindia
