06 October 2010
i am doing internal audit of a client. it is observed that booking of expeses is not done and expenses are booked only at the time of payment. E.g. telephone exp. ---dr 12000 to bank---12000 instead of passing foll. entry tele exp------12000 to exp payable----12000
exp payable----12000 to bank----12000
what for miscellaneous expenses like local conveyance exp of rs.10, tel exp rs.5 etc.
01 November 2010
there is nothing wrong in making such entry, if the same has been made immediately and within the cut off period march 31 of dec 31 as the case may be,...
however if the expenditure of the march is paid and booked in april, the assumption of cut off will be losting... u need ensure that the all the expenditure for the march month, or the provisions should be booked properly..
in case of miscellaneous expenditure u can of course look into the materiality of the engagement.... however u should check the policy of the entity ..
CAclubindia
