Date of booking expenses

In this case liability of co arises in month of April'13, so it must be booked in April'13..

Normally in business either you outsource your staff or not, salary is paid near 7th of next month, and the entry is passed on the day when payment is made, for every month's salary entry is made in next month, and in narration we write the month (like in above case April), and when cheque is issued after 30th april we cannot made entry on 30th april.

We have to book the salary when it becomes due..rising of bill does not matter......if the abc ltd. is totally outsourced through XY8 ltd.then in that case it will be payment under contract and xy ltd.has to book the salary exp..........

It is bcoz if I use payment basis then monthly expenses would not be reflected correctly in the books as previous months expenses would be reflected in the current month.

There is a journal entry concept also, you can due the expense in april and make a payment entry in may

Book the expenses in the month of April and payment entry will be made in the month of May ....