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Journal entry

Mohan Oli (Student) (58 Points)

13 June 2016

Sir/madam, A party has made a provison for exps of Rs 740691 in FY 13-14 and made the payment of provision amount in FY 14-15.However ,this was the advance payment against the repair and maintainance made in FY 14-15.Now ,adjustment bill had come of Rs 600000 in this FY 15-16.please let me know what will be the ractification entry made this year???

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Saliq Ansari (CA_Final Student) (885 Points)
Replied 13 June 2016

This should be treated as per the AS 5 Net profit or loss for the period, Prior period items and changes in Accounting policies.

Any error or ommision of past year come to known in current shall be recorded as prior period item in current year in Statement of P&L seperately shown as Prior Period.

Expenses Booked in 13-14 Rs. 740691/-

Actual Expenses in 15-16 Rs. 600000/-

Difference of Rs. 140691 should be credited in current year F.Y. 15-16 and to be shown as seperately as Prior Period Item.

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