03-01-2009, 11:47 AM
hi all
i understand that when no bill is received for the month that incurred expenses, we need to accrual or make provision. for example electricity bill.
what i need to make it clear is the expenses that we need to pay quarterly or bi monthly or yearly we also need to make provision monthly.
may i know why we need to make provision for expenses that pay out not monthly basis like yearly, half yearly or quarterly. 1 reason is to avoid a suddenly increase in p&l during the month that book the actual expense? i do not think this is the main reason. can explain with example what is the real reason?
thanks
i understand that when no bill is received for the month that incurred expenses, we need to accrual or make provision. for example electricity bill.
what i need to make it clear is the expenses that we need to pay quarterly or bi monthly or yearly we also need to make provision monthly.
may i know why we need to make provision for expenses that pay out not monthly basis like yearly, half yearly or quarterly. 1 reason is to avoid a suddenly increase in p&l during the month that book the actual expense? i do not think this is the main reason. can explain with example what is the real reason?
thanks
