26 January 2009
How do you write-off expenses. For Eg., expenses incurred in the year 2005 & 2006. Audit is done in the financial year 2008. Can these expenses incurred in 2005 & 2006 be writen-off in the financial year 2008. If YES, what is the procedure and what journal entries to be passed? Also, what is the impact on Balance Sheet and P & L Account? OR How does it affects BS and P&L account?
26 January 2009
Yes it can be written off... If it was not written-off by-mistake in earlier years, then it should be shown under "Prior period items" on face of P/L A/c... There is no procedure as such... It should meet the authorization process defined in the entity...
JE: Exp ... Dr To Cash Bank...
Note: I understood ur query as though u are asking for items left un-written off by-mistake...
27 January 2009
Thanks for your reply Sir, however, if the expenses are written-off in the current year will the profit of the curent year be affected or reduced by that margin. Please reply...
CAclubindia
