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Querist : Anonymous

Querist : Anonymous (Querist)

30 June 2016 I've booked excess revenue in the year 2014-2015 with it's corresponding effect in debtors. In the year 2015-2016 the mistake is detected what would be the correct entry for the year 2015-2016. According to me it would be
Reserve A/c Dr.
To debtors
Please correct me if i am wrong.

Thanking you in advance.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

30 June 2016 Debit the profit& loss a/c., as prior period item and credit debtors

Querist : Anonymous

Querist : Anonymous (Querist)

30 June 2016 earlier i too was thinking this but then i thought it wasn't really an expense, is it? that's why thought to route it through reserves.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

30 June 2016 Separate place is there for prior period item in P&L a/c

Querist : Anonymous

Querist : Anonymous (Querist)

30 June 2016 i am very well aware of that but all i want to confirm is whether excess revenue recognised will be considered as prior period expense or not?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

30 June 2016 As per Accounting standard " Prior period items are income or expenses which arises in the current period as a result of errors or omissions in the preparation of financial statement of one or more period. so ultimate effect in your Reserves & Surplus ( Retained earning only). but my suggestion it need to be routed through in financials instead of direct adjustments

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