Accounting

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 May 2013 Hello CAclubindia, Is is right to deffer the expenditure & allocate it throughout the year in equal proportion. for eg: donation made of rs.80000 in the month of august 2012 so here the acctng entry passed was like this 1) Donation A/c --------dr 80000 to Cash/bank A/c 80000 2) P/L A/c ----------------dr 8000 prepaid Exp a/c ----dr 72000 to Donation A/c 80000 ( Donation exp of Rs.8000 booked for the month of aug 2012 & remaining deffered for remaining months) Is this the right way of accounting. best regards navin

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CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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30 May 2013 An expenditure can be deferred only when the benefit of that expenses will be getting more than one accounting period, but in case of donation what benefit you will get with deferring. so you can debit at once in p&l a/c