R2R:ONE COMPLEX JOURNAL ENTRY ENSURE 50% PROBABILITY TO CLEAR INTERVIEWS RELATED TO JOURNAL ENTRY

[@pavan825]

Why it's not Accrued instead of provision?

[@AccountsGurukul]

We have both the options. Accrued expenses where we know the exact amount to pay then yes accrued or else its provision. Most of the entities follow once ledger as provision instead of having two and few its mandatory to keep separate as accrued and provision. Thanks

[@Lakshman-iq7tk]

Sir, What about the TDS entries..?

[@AccountsGurukul]

Please refer below link. We have created video and uploaded for all our viewers. Thanks a lot. kzbin.info/www/bejne/jZbTfYZoo9Vljdksi=H0Rg3dZmOC-AHKqG

[@anandkhangarot8694]

I have writing my solution before watching the full video. As on contract date we have to create a liability. If i assume the services are Advertising services then First Entry on Contract date. :- Deferred Advertising Expenses a/c Dr. To B Ltd. and in Jan Month i will book actual expense :- Advertising Expenses a/c Dr. To Deferred Advertising Expenses A/c.

[@AccountsGurukul]

Sorry we can't create liability for entire amount on contract date. We have just entered into contract and we haven't received any services. Every month we have to create provision for expenses and until and unless we have the actual invoice from vendor we can't create the liability on vendor name so the every month we have to create provision for expenses. When we have the invoice the entry should be: Expenses account Jan to Apr Dr Prepaid expenses May to Dec Dr To Vendor account cr Last We have to do reversal of provision for expenses. Thanks

[@anandkhangarot8694]

@@AccountsGurukul Sorry to bother you but I want to enhance my knowledge as well, AS per IAS 37 ' Provision is a liability of uncertain timing or amount ' but in this case amount is already certain.

[@anandkhangarot8694]

Ideally provision should be created for uncertain amount like warranty, Doubtful Debts etc. Here we had contacted with B to buy the goods and we are contractually obligated to pay.

[@anandkhangarot8694]

Please don't take otherwise bro, your channel and content are great. Keep it up.

[@AccountsGurukul]

No worry. Its our passion. Is that OK if we do create video on this to explain in details to all our viewers. Will create and upload by tomorrow. The both are different term and have different meaning. Thanks