Provision for exps.....

Make the provision only for the period form 15th Mar-31st Mar.  Then when you make the pymt in the month of Apr post the entry by debiting the provision account, then the expense account & credit Cash/bank A/c.

One can also make an assumption that, for the bill period upto 15th of the month it can be considered as an expense for that whole month & making the provision for the whole bill amount.  this will be depending upon the policy of the company.

it is better to make provisions than debiting the full amount in one month. expenses bifurcated accordingly will help in improving the bottom figure if you are preparing monthly P & L statement.

debit that much amount as related till 31.03.2012 as  telephone exp & also debit amont up 15th april in prepaid exp a/c , credit  to party/cash/bank. & next year reverse the preaid exp to exp of that year

Mr Pradeep.  An amount is transferred to prepaid account, only if the expense is paid in advance.  In this case, Tejas wants to make the provision for the elect & tel bills & he is not making any payment.  Payment will be done in the next year i.e. April.  so how can the prepaid account come into the picture??

You can follow any of the options given below -

1. You can just create a provision for the amount of expenses till March 31 and then you can reverse the provision and account for the entire bill; or

2. You can account it as an expense for the entire amount in the month of March itself.

For credit card, you can bifurcate the expenses based on the date of making payments.