Invoice issued in advance

A/c entries 653 views 9 replies

lalit garg

45 Points Joined November 2010

hi,

Suppose I have received an invoice for expenses due in next year and payment is not made against this invoice in current year.

Advise me accounting entries regarding above in my books?

Replies (9)

Piyush Tanwar

Assistant Manager - Accounts

1432 Points Joined October 2009

Expenses A/c --- Dr

To Provision for Expenses A/c

lalit garg

45 Points Joined November 2010

How can we debit the expenses account in P&L because the expenses are related to next year

SMd Mohaseen

professional

44 Points Joined October 2015

No need to make entries in Current Year. To be made only when the expenses are due or paid in Current year.

CA Prakhar Jain

Partner at Jain M Prasad & Co

710 Points Joined July 2014

No entry By the way, can you give an example of when such a situation arises practically. I don't think any invoice is raised where neither goods/services provided nor payment required to be made.

yogesh T G

accountant

40 Points Joined July 2010

Please write question with proper example

G B S KALYAN KUMAR

Dy Manager - Finance

24 Points Joined April 2010

Prepaid expenses a/c Dr To Vendor A/c (Being expenditure for future period accounted) Pay as per payment schedule and write off expenditure in respective Accounting period.

lalit garg

45 Points Joined November 2010

Example :

We have a company A ltd.

B Ltd. issued invoice of rs 4000 on 10-10-2015 for services to be given for the period 10-10-2015 to 10-10-2016. No payment made to B.Ltd till 31-12-2015.

tell me the accounting treatment for the financials ending on 31-12-2015.

this is happening in real

Example : We have a company A ltd. B Ltd. issued invoice of rs 4000 on 10-10-2015 for services to be given for the period 10-10-2015 to 10-10-2016. No payment made to B.Ltd till 31-12-2015. tell me the accounting treatment for the financials ending on 31-12-2015. this is happening in real

Mohammad Adil

Accountant

64 Points Joined December 2015

Entry as on 31.03.16

service exp a/c dr

To service exp payble

Note:- if payment not made till the financial year ends then calculate the amount of exp which is related to current financial year and then book the exp at the end of the financial year 31.03.16 ( 4000/365,*no.of days)