Pls guide me whether we need to create a provision in the books for the assets procured and payment yet to be done.
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provision for payments for assets purchased in the year end.
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No need of showing separate provision for payment towards acquisition of Fixed Assets. It will be shown under the head Sundry Creditors, as it is still payable.
Following is the Journal Entry to be passed as on 31/03/2011 :-
(Assumed that the Fixed Asset is purchased on the above mentioned date)
Fixed Asset A/c Dr. XXXXXX
To Sundry Creditors A/c XXXXXX
(Being Fixed Asset purchased)
Regards,
Devendra K
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