Save BIG on 2-Yr Ad-Free CAclubindia Pro Membership. Subscribe Now!

Accounting

Save Share

Join Us Follow Us Add as Source

This query is : Resolved

Report Follow Query Ask a Query

Querist : Anonymous

Querist : Anonymous (Querist)

30 May 2013 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

Read more at: https://www.caclubindia.com/forum/accounting-of-expenses-251087.asp

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
Follow

30 May 2013 An expenditure can be deferred only when the benefit of that expenses will be getting more than one accounting period, but in case of donation what benefit you will get with deferring. so you can debit at once in p&l a/c

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now