in accounting so many peoples are telling writeoff this expenses
typically Writeoff means what in Accounting...
And Written off???
Normally we write off the income that we never going get from debtors , as a Bad debts (subject to audit and permission of higher authority or what accounting stranded suggest ) , however some time we have write off expenses also in following manner
Write off / written off expenses is expenses that to nullify the amount from books of accounts you never going pay , or creditor never ask you to pay , this amount is lying in Balance sheet as a creditors , can be written off (subject to Audit and permission of higher authority ), as we can not keep on carry forward many years , same will be income to us after written off .
For example we have received Invoice for credit purchase of Goods any other expense or receipt of service , we pass entry .
Purchase / Expense A/c Dr
To Trade Creditors A/c Cr
( Booking of expense entry )
After some years , you realize that creditors never ask you to pay or never followed , so you can write off such expense by passing following entry .
Trade creditors A/c Dr
Trade creditors written off A/c Cr
( creditors written off)
you have show Trade creditors written off A/c under indirect Income in profit and loss account ,
Note - In short written off means to nullify the amount form the books of accounts , that you never going to receive or never going to pay ( subject to Audit and permission of Higher Authority and what accounting standard suggest )
CAclubindia
