what is the difference between outstanding expenses and provision for expenses?
CA Krishna Chaitanya M (Chartered Accountant) (463 Points)
31 August 2011what is the difference between outstanding expenses and provision for expenses?
Nitin Garg
(CA FINAL Article Trainee B.com)
(171 Points)
Replied 31 August 2011
Expenses which are which becomes due or payble are called outstanding expenses.. we knows the amount of axpenses so so paybles...
whereas provison for expenses are provisonal in nature.. i.e. we dnt know the exact amount of expenses.. we just makes an estimate or budget...
CA Krishna Chaitanya M
(Chartered Accountant)
(463 Points)
Replied 31 August 2011
may i know the journal entries to boh
Amit Gupta
(Loosening Myself)
(1508 Points)
Replied 31 August 2011
Expense A/c Dr
To Expense payable
With the amount it is due and known with certainity but not paid
For Provision:
Expense A/c Dr
To Provision for expense
With the amount which is pertaining to period of reporting but the amount is not certain..As in case of electricicty exp u dnt have the bill as on 31.3.2011 but an entry should be passed based on expectation.
CA Krishna Chaitanya M
(Chartered Accountant)
(463 Points)
Replied 31 August 2011
what is the correct entrY for provisions:
expenses a/c Dr
to outstanding expenses a/c Cr
or
p & l a/c Dr
to provision for expenses a/c Cr
Nitin Garg
(CA FINAL Article Trainee B.com)
(171 Points)
Replied 31 August 2011
agreed with amit....
CA Krishna Chaitanya M
(Chartered Accountant)
(463 Points)
Replied 31 August 2011
i think appropriation against profit is for reserves, is it applicable to provisions ?
sivaram
(Asst Mgr-Taxation)
(6918 Points)
Replied 31 August 2011
Chaitanya
Provision comes above the line so it is not an appropriation
srinivass
(CA Final)
(2466 Points)
Replied 31 August 2011
| Originally posted by : Nitin Garg | ||
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Expenses which are which becomes due or payble are called outstanding expenses.. we knows the amount of axpenses so so paybles... whereas provison for expenses are provisonal in nature.. i.e. we dnt know the exact amount of expenses.. we just makes an estimate or budget... |
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