provision for expenses

If  this bill received before finalisation of books then you can consider ot expenses for that year.

You can debit the expenses a/c and Credited to party's persnal a/c If that bill has beeln received after finalisation of Books the entry will be Outstanding Expenses A/c Dr to Bank

For out Standing Expenses there must be a provision in last years book  which can be done as Expenses a/c Dr  to Outstanding Expenses.

If there are no provision and your books has been finalized then this expenses can be book in this year and  in P/L A/c that should be shown below the line

Hie,

You are talking about the expenses which has come upfront in the current financial year but related to last year in that case according to AS-5 any expenses or fact which will come to the knowledge of an auditor he has to make the provision of expenses in the current financial year through P& L A/c  but if expense related to last year then it has to be booked as PRIOR PERIOD EXPENSES which wii be reflecting in the P&L A/c below the line.

 I agree with sanjeev

An employees conveyance allowance is Rs. 14205/- in 2008-09 as per salary certificate. But in one of the month he has received Conv. allowance less Rs. 800/- i.e. 639/-. What to show in form 16 towards conveyance allowance. - Rs. 800* 12 or Rs. 800 * 11 + 639. Pls suggest.

Hie,

Your Second ans is correct because as per law Amount received or Rs.800 whichever is less shall be claimed exemption & this excercise has to be carried out for each month sepreatly.

Can u explain exactly about provision for expenses and income

can any one clarify me that how one can decide is expenses belong to previous year or next year if paymnt  has not been paid.

But Company raises purchase order in the month of march & the invoice has been recived in the month of april.

case i) material rec. in month of march

case2) mat rec in month of april.