prior period exp

This query is : Resolved 

19 September 2007 if a employee goes for official work to outstation.he went in march2007 but comes on april 2007. he submitted his TA bill in april. the expenses related to march 2007 is booked in april 2007. whether it is prir period exp. or not? he did not took any advance from office.

19 September 2007 Hi Rahul,


When did that employee return, If in April then your books would show the Advance and these expenses are not prior period Exps.



19 September 2007 Whether he has taken advance or not, if journey is incomplete on last day of the financial year then all expenses relating to the same are for the year in which the journey is completed.


19 September 2007 The point of time of accrual of liability to the company is to be identified first. If it is the practice of the company to consider the liablity only on submission of bills by the employee the liability accrues to the company on submission of bills by the employee.Then we must follow fundmental accounting assumption i.e. accrual in April only. Otherwise strictly make a provision for the expenditure incurred by the employee upto 31st March on a reasonable estimate basis

20 September 2007 All expenses till the year end date has to be recorded. Hence the expenses incurred on travelling and conveyance till 31st March whose bill was submitted after that date should be recorded in the books for the year ending 31st March. Hence, if it is booked in April, a part of it is a prior period expense and should be disclosed separately as per AS 5, provided the expense is material



You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join CCI Pro
CAclubindia's WhatsApp Groups Link


Similar Resolved Queries


loading


Unanswered Queries