Receivables and accrued payroll

Dear Jyotsna, would you please eloborte your reply.  My friend has issued credit notes for those removed opening balances, but they are not picked up in the Bills Receivable ledger of customers.

Please help.

thanks

If the opening balance can be removed in the current year by writting off the liability. In such case it will effect the income statement of the current year. If the opening balance of the debtors is to be written off in the current year, it has to be shown as expenses in doubtful debts.

If the credit notes are issues, they can be picked up in Bills Receivable ledger only if proper reference against which bill it is issued is mentioned.

Dear Ms.Amrita, Thanks for the reply.  But I have something to let you know.  In any Financial year, you can't touch the Opening Balances because they are the  figures that have been already submitted to the Taxes Dept and the IT amount also settled.  You need to supplement with more informations to your company Auditor in support of it.

I have advised my friend to settle this way.  I have asked him to issue Credit Notes to the respectives customer accounts (with reference to the Invoices issued as you mentioned), taking it to Sales Return Ledger a/c. which will be a Liability.  This Liability will be offset the Sales Ledger figure at the end of the year.

In the case of PayRoll, I asked my friend to check the monthly accruals of each employee and locate whereever the entries were made with less / more payment situation.

Thanks again for replying.

TAMIJUDDIN M