Why we need Provision for Expenses Item?

answered on 31-Jan-23 12:06

"Provision for Staff Welfare," I notice in one question. I thought that provision is for Bad Debt , Income tax etc., to ensure Matching Concept. Then Why Need Provision for Staff Welfare, Staff Welfare Expenses Incurred and accounted in same year, there is no provision required to meet the Matching Concept!

latest answer

Sometimes to avoid huge expenditure which is contingent

Yoganathan LAKSHMANAN

CA Inter

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241

Sir Genral donasation example

answered on 30-Jan-23 09:38

5 ex

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Donation without any specific purpose. Like you donate money to a school without telling what is the money to be used for.

R K

ACCA Skill

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183

Closing value of investment

answered on 14-Feb-23 12:28

If a company purchase a share of x ltd at rs 100 and during the year another share is purchased at rs 90 , no sale is occur ,FIFO method is used by company, market value at the end is 94 rs What will be the carrying value of investment

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Ok understood

Atharv Sankliya

CA Final

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246

As 1

answered on 30-Jan-23 16:29

Can u explain the 2nd part of this illustration?

latest answer

After sales expenses - like warranty. the company does not want to create a provision for this.

Kamal Kumar

CA Inter

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235

Advance accounting inter grp 2

answered on 26-Jan-23 08:53

I need to know how they distribute tha purchase consideration, because our 85500 partly to be distributed as cash and partly share Illustration 6 in module 1 , may 2021 onwards

latest answer

The amount partly paid as cash is the balancing figure from the cash and bank account.

Keerthi Sck

CA Inter

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240

Pre and post incorporation

answered on 26-Jan-23 08:22

I have one doubt in ill7 icai model of pre and post incorporation chapter adjustment 3 bad debts recovery 7000 added in bad debts of 91000+7000 why add 7000 of recovery ??

latest answer

Till the year 20X1, we had Rs.7000 as bad debts. During the year 20X1 we recovered the bad debts of Rs.7000, so it is considered as Income and shown on the income side. The question says "Bad Debts after Adjusting the recovered Bad Debts is Rs.91000". Before recovery total Bad Debts are Rs.98000. We have the bad debts till 20X1 before the recovery so it should also be in the Bad Debts total amount.

Kruthika Ramesh

CA Inter

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271

Amalgamation

answered on 25-Jan-23 09:21

Difference between intrinsic value and market value

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Intrinsic is based on balance sheet. Market value is based on the price prevailing in market.

Krishnan K

CA Inter

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Single entry system - illustration 5

answered on 23-Jan-23 21:37

Can someone help me with creating and ledger for building account....... Am getting an addition value of Rs 8000 where as in books it is Rs.4000

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no problem brother

poco m2 pro

CA Inter

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233

Chapter-Buyback of shares Illust-4

answered on 24-Jan-23 09:17

Why securities premium used to adjust premium on redemption of preference shares?

latest answer

So when a company complies with Accounting Standards, it cannot use securities premium account to provide for premium. So the ideal entry should be to Debit to P&L and not securities premium account.

Vasu Naidu

CA Inter

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367

Functions of Accounting

answered on 26-Jan-23 18:18

It says that Accounting measures past performance and PRESENT financial position. Question is this , without preparing current period's Profit and Loss a/c, how can it measure PRESENT FINANCIAL position ? Please guide me

latest answer

It is true that Accounting measures past performance and PRESENT financial position. Past performance means the entity's performance in the past accounting year is reflected thought P & L. The P & L can be prepared only when the past period ends and it shows the performance of the entity in the past period. Present Financial Position refers to the current position of the entity through its Balance Sheet. It shows the entity's position as on a particular date. So, Past Performance - P & L Present Position - Balance Sheet And, it is true that Balance Sheet can be prepared only after the preparation of the P & L

Thankachan Jimmy

CMA Inter

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