Provision for expenses -Journal Entry,TDS Impact, How to book actual invoice? Reversal of Provision🤔

Provision for expenses: Meaning
TDS Impact on provision for expenses
Journal entry with tds on provision
How to book actual invoice against provision for expenses?
Reversal of provision & TDS Impact at the time of booking actual invoice?
Tds ledger balance after Booking the actual Invoice

[@udaygupta9316]

Awesome video ❤ i was searching and i found this video only till now ,

[@AccountsGurukul]

Its our pleasure. Thanks a lot.

[@ganeshrane3710]

thank you sir God Bless you. I search this video on you tube

[@AccountsGurukul]

Its our pleasure. Thanks a lot.

[@rupeshsinha9124]

sorry to say but with giving full respect i would like to say that the reason behind the booking of provisional expenses is to matching concept that expenses are book on that year in which it is related even it was not paid so if you reverse all entry in next year then objective of expenses recorded in last year was failed so in next year our entry is only to reverse the name of provision liability with the name of actual liability and then paid for it instead of reverse the expenses. so that impact of expenses are lies on last year.

[@AccountsGurukul]

No that's not the right. Please understand with below example:
31st March 2021 we have created provision for office expenses Rs 50,000 now will see the impact of this
31st March
Office expenses A/C Dr 50,000
Provision for exp A/C Cr. 50,000
Expenses booked in FY 2020-21
Now when we do reverse the provision - actually when we have received the invoice and booked into system assume that we have received in Jun21
01st Jun 21 when we are booking
Office expenses A/C Dr 50,000
To Vendor account A/C Cr. 50,000
Paid
Vendor ac to bank
Now we if you see here we have debited that expenses to P&L which is pertaining to FY 2020-21 and same has already been accounted in last FY and available as provision for expenses
We have to reverse the provision
Provision for exp Dr 50K
To office expenses. 50K
Hope its clear now. Thanks

[@azharsalmani818]

Is it possible to do it??
At the end of the month
Expenses A/c .....Dr ₹5,000.00
To Provision of Expenses A/c ₹5,000.00
At the time of receiviing invoice
Provision of Expenses A/c.....Dr ₹5,000.00
To Sundry Debtors A/c ₹5,000.00

[@AccountsGurukul]

Thanks for the query. Please refer below video to get more clarity on same.
ruclips.net/video/gwhSOreEZXw/видео.html
Thanks a lot.

[@yesbond3381]

Thanks!

[@AccountsGurukul]

Its our pleasure. Thanks

[@panditsachin859]

Well Explained.

[@AccountsGurukul]

Its our pleasure. Thanks a lot.

[@yaswanthpeddada5581]

Great information 😄

[@AccountsGurukul]

Thanks a lot.

[@ranjeetray6125]

Hi sir, plz also create video on differed tax and expense

[@AccountsGurukul]

Sure shorty will come up with video on asked concept. Thanks

[@chaitanyagambhir8489]

Thanks for the video.. one query is how to remove the tds reflecting in tds outstanding report when we book actual invoice received. Because after reversing provison, tds ledger gets nullified but tds keeps reflecting in tds outstanding report. Please guide on this. Thanks in advance

[@AccountsGurukul]

Please refer below video:
ruclips.net/video/2AScxBUiieI/видео.html
Thanks a lot.

[@chaitanyagambhir8489]

Thank you very much for considering my query.

[@adityashinde477]

Very coceptual

[@AccountsGurukul]

Thanks a lot.

[@aswanipoddar5937]

Sir, Vendor ne AMC bill diya hai for period mar 2023 to may2023. Bill date 01.03.2023 hai. Bill amount 40000 hai... Iska provision kaise kare .. Pls guide

[@AccountsGurukul]

Please refer below video:
ruclips.net/video/YinC-O8ACw8/видео.html
Thanks a lot.

[@happydude4u67]

thankyou sir

[@AccountsGurukul]

Its our pleasure. Thanks a lot.

[@Satnd369]

helpful information 👌
What if invoice amount comes more or less than provision what will be impact on TDS amount it often happens in civil work bill they provide estimate amount of provision ?

[@AccountsGurukul]

Thanks. Will create one video on this.

[@karanshelke9675]

Hi vaibhav mama

[@anandrajmurari9587]

Why should we not deduct TDS on monthly basis recorded provisions

[@ayushbisht2344]

Let me clear plz can we do instead of this
31st mar
Expense a/c dr-50000
Tds a/c 2% cr- 1000
Expense payable cr-49000
In first april
Expense payable-dr 49000
To vendor's - cr 49000

[@anandthakur4218]

what to do when their is a difference between actual and provision amount after approval and audit of CY financial statements?

[@AccountsGurukul]

Will create video on this in this week. Thanks a lot.

[@AccountsGurukul]

Please refer below video to get more clarity about the provisions.
ruclips.net/video/qFb_-642lmI/видео.html
Thanks a lot

[@devenderrawat3703]

Please clear my doubt.
If we book TDS rate @7.50% in June 2021 then when we file TDS return it shows an error that TDS rate for current year is 10% accordingly software shows demand of difference amount that is 2.5%

[@AccountsGurukul]

Yes will create a video on this today. Thanks

[@devenderrawat3703]

@@AccountsGurukul Thank you for revert.

[@AccountsGurukul]

Its our pleasure.

[@AccountsGurukul]

Lower TDS rate was there till 31st March 2021 and after the rate revised to 10%. In this case you have to pay the differential amount with late payment charges and file the etds return. Thanks.

[@AccountsGurukul]

If the provision was created before 31st march then the situation will change. Pls confirm.

[@justclicking5761]

Sir,
Why didnot you debit input tax while booking audit fees invoice

[@AccountsGurukul]

Here we are talking two different things, one provision for audit fees and second booking of audit invoice. When we are taking provisions for audit fees we have to do with only basic amount and not with taxes because the taxes is not our expenses and we are able to get input credit for same so we have to take it when we have actual invoice.
Second yes once we have the actual invoice we have to take input taxes into account.
Provision is only for the expenses.
Thanks.....

[@justclicking5761]

@@AccountsGurukul
Yes we can take input tax credit only when we have original GST invoice

[@AccountsGurukul]

Yes thats true so the provision is with basic amount and invoice will book with taxes once we have actual GST invoice.
Thanks

[@bsthishvarma]

Hello sir,
if provision for expense is booked lesser amount than actual invoice, how to book difference amount after receiving actual invoice

[@AccountsGurukul]

If this is related to the financial year end then yes. You have to book excess amount into March and do the tds payment because the expenses related to previous financial year. Thanks.....

[@AccountsGurukul]

If TDS applicable on that.

[@akashtak4531]

Sir, suppose the amount of actual expense is more than the provision amount than shall we make the payment of tds on the excess amount??

[@AccountsGurukul]

If this is related to the financial year end then yes. You have to book excess amount into March and do the tds payment because the expenses related to previous financial year. Thanks.....

[@akashtak4531]

Thank you Sir. Also, what if the actual expense is less than the provisional experience??

[@AccountsGurukul]

We have to written back the excess provision and take it to indirect income.

[@akashtak4531]

@@AccountsGurukul Okay Sir, so we don't have to do anything for the excess deposit of TDS. The supplier will just get the credit.

[@AccountsGurukul]

No you have to recover that from vendor. Suppose excess gross amount 100 & deducted tds 10
Entry should be provision account dr 90
Tds account Dr 10
To provision written back 100
Next
Vendor account Dr 10
To tds account cr. 10

[@sunnydeb7661]

Gst claim process on provision?

[@AccountsGurukul]

Its provision and we have to take this with consideration of only the basic amount and no any impact of taxes. Thanks a lot.

[@happydude4u67]

can you teach sap ?

[@AccountsGurukul]

Yes we can. Please drop email on our email id [e-mail] will wait for your email. Thanks