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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)
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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)
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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)
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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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