Last year's mistake

This query is : Resolved

Ritu Alwani (Querist)
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06 February 2017 An advance payment given to an employee on 31st march was treated as an expenses. Now in the current financial year that person is repaying the that advance. How to treat that advance??

Sandeep Dharar

Sandeep Dharar (Expert)
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06 February 2017 Pass a reverse entry for that. Well, it is not the process but u have no option left other than that. For example at the time of advance suppose u have post an entry like this:-

Expense Ac Dr.
To Cash/Bank.

So u have to just reverse the entry like

Cash/Bank Dr
To Expense.

Keep in mind that u must have to disclose all the details in the narration so that one can understand and make others understand through the details in the narration.