taken from the
Should it happen that the amount of a specific expense incurred
couldn't be determined exactly at the end of a financial period or financial
year, provision is made for the expenses in the accounts. This provision for
future expenses works on the same principles as that of accrued or outstanding
expenses. The expense is recorded before the payment is made. It will decrease
the profit for the financial year, but a liability will be created which will be
paid in the next financial year.
To Identify, Enter the Transaction and to Post the Transaction to the Ledger:
For example, the pre-adjustment trial balance
reflects no amounts for expenses for repairs on motor vehicles. On 26 February,
the delivery van gives mechanical problems and is taken to the garage. It is
estimated that the repairs to the delivery van will be approximately R(£) 2 000.
It will take approximately 3 weeks to repair the vehicle.
Enter the transaction in the General Journal.
Press the 
key on your keyboard or click on the 
speed button or icon. The Batch Type
selection screen will be displayed.
Select the General journal Batch Type and click
on the 
button. The General journal Batch Entry screen will be displayed. If
the correct contra account for the batch was not displayed on the Batch Type
selection screen, press the 
key on your keyboard or click on the
speed button or icon to set the options
for this batch. Note that it is recommended that the Amount Entry field be set
to allow both (debit and credit).
Enter the transaction in the batch. After
entering the transactions in the general journal, the transactions is as
follows:
Click on the 
speed button or icon or press the
key on your keyboard. Select the change the alias option.
Click on the 
speed button or icon or press the
key on your keyboard to post the transactions to the ledger. After
posting the transactions to the ledger, the entries should reflect as follows in
the ledger.
The amount that should have been paid for the financial year is the amount on the pre-adjustment trail balance, if any plus the amount of the provision for future expenses. The expenses are increased (debited) and current liabilities are increased (credited).
To Identify, Enter the Transaction and to Post the Transaction to the Ledger:
For example, the pre-adjustment trial balance
reflects no amounts for expenses for repairs on motor vehicles. On 26 February,
the delivery van gives mechanical problems and is taken to the garage. It is
estimated that the repairs to the delivery van will be approximately R(£) 2 000.
It will take approximately 3 weeks to repair the vehicle. Enter the transaction in the General Journal.
Press the key on your keyboard or click on the speed button or icon. The Batch Type
selection screen will be displayed. Select the General journal Batch Type and click
on the button. The General journal Batch Entry screen will be displayed. If
the correct contra account for the batch was not displayed on the Batch Type
selection screen, press the key on your keyboard or click on the
speed button or icon to set the options
for this batch. Note that it is recommended that the Amount Entry field be set
to allow both (debit and credit).Enter the transaction in the batch. After
entering the transactions in the general journal, the transactions is as
follows:
Click on the speed button or icon or press the
key on your keyboard. Select the change the alias option.Click on the speed button or icon or press the
key on your keyboard to post the transactions to the ledger. After
posting the transactions to the ledger, the entries should reflect as follows in
the ledger.The amount that should have been paid for the financial year is the amount on the pre-adjustment trail balance, if any plus the amount of the provision for future expenses. The expenses are increased (debited) and current liabilities are increased (credited).
