Hello CAclubindia,
Is is right to deffer the expenditure & allocate it throughout the year in equal proportion.
for eg: donation made of rs.80000 in the month of august 2012 so here the acctng entry passed was like this
1) Donation A/c --------dr 80000
to Cash/bank A/c 80000
2) P/L A/c ----------------dr 8000
prepaid Exp a/c ----dr 72000
to Donation A/c 80000
( Donation exp of Rs.8000 booked for the month of aug 2012 & remaining deffered for remaining months)
Is this the right way of accounting.
best regards
navin
CAclubindia
