Utsav Sales has been providing for the bonus liability. From this year, it desires to account it on payment basis. Which accounting concept does not permit it?
Answers
Explanation:
Short title, extent and application.—
(1) This Act may be called the Payment of Bonus Act, 1965.
(2) It extends to the whole of India 1 [*].
(3) Save as otherwise provided in this Act, it shall apply to—
(a) every factory; and
(b) every other establishment in which twenty or more persons are employed on any day during an accounting year: 2 [Provided that the appropriate Government may, after giving not less than two months’ notice of its intention so to do, by notification in the Official Gazette, apply the provisions of this Act with effect from such accounting year as may be specified in the notification, to any establishment or class of establishments [including an establishment being a factory within the meaning of sub-clause (ii) of clause (m) of section 2 of the Factories Act, 1948 (63 of 1948)] employing such number of persons less than twenty as may be specified in the notification; so, however, that the number of persons so specified shall in no case be less than ten.]