How to account previous year expenses? Do we need to show as prior period or can we account under concerned a/c ? What AS says ?
2 Replies
Ram Avtar Singh
(Nagari Sultanpur U.P.Delhi)
(14497 Points)
Replied 20 October 2009
its depen on Nature of Exps. Like Telephone , Electricity, paybale booked in march. but misc exps. due to mismanagment not booked when your balance sheet finialized. its a audit mistake avoid in future. Now book in april month.
hemal
(CA FINAL)
(176 Points)
Replied 10 November 2009
As per AS=5, expenses for the period & income for the period is charged or credited to PL account if it is due to error & omission it is prior period adjustment & its effect required bcoz of tax purpose. In income tax those expenses are not allowed as deduction.
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