21 June 2010
On Behalf Of My Friend I Would Like to solve some queries which are as follows. Who will be appearing the Dec 2010 CPT.
1)What do u mean by understated & Overstated. With the help of a example(S)(S).
2)Chapter No. 8 The Book Given By the ICAI Which says if the interest is on drawings or on the capital & if the withdrawals are made evenly i the begininng of the month, interest can be caluclated easily for the whole of the amount of 6.5 months but if withdrawals are made at the end of the month than interest will be calclauted for 5.4 months while is those becase as per the aprtnership act, 1932 there is no provision like this which has been said by the books (refer to the page no. 8.10) of the book issued by the insitute ICAI.
If an expense is of Rs. 25000 say rent but we expensed off only 24500. So, it is been understated by Rs. 500 and it need to expensed off in the profit and loss account.
Similarly, in the above case, if the above expense is debited in the profit and loss account by Rs. 26000 so it can be said it overstated by the Rs. 1000 and it needs to be reversed.
If an expense is of Rs. 25000 say rent but we expensed off only 24500. So, it is been understated by Rs. 500 and it need to expensed off in the profit and loss account.
Similarly, in the above case, if the above expense is debited in the profit and loss account by Rs. 26000 so it can be said it overstated by the Rs. 1000 and it needs to be reversed.
CAclubindia
