Go AD-Free with CAclubindia Pro and Daily WhatsApp Updates. Subscribe Now!

Accounting entry

184 views 2 replies

Rajalakshmi Nair

Finance Professional

36 Points Joined September 2014

Dear Friends,

We have contracted two consultants for 1 and half months statring from 29th of March 2016 till 10th of May 2016. now as their contract came to an end, we are processing their payment and here i am facing a confusion. should we book their remuneration for 2 days in March itself or is it ok to book entire amount while paying them.

Request your guidence.

Thanks in advance

Replies (2)

Manish Jain

Chartered Accountant

119 Points Joined July 2015

Accrual is one of the fundamental assumptions as per Accounting Standard - 1. The said expense have accrued in the month of March 2016. So it should ideally be recorded in the same month.

If it is recorded in the month of May 2016, it will result in deviation from the Accounting Standards.