Debit notes accounting

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Roshan A (Querist)
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12 June 2013 What should be treatment of Debit Notes raised by creditor for late payment to creditor in following cases:

1. DN dated 27/04/2011 relating to late payment of Invoices of FY 10-11 being booked in books of FY 12-13.Whether Prior Period or not? (Note: Payment of these invoices of FY 11-12 was made on 12/2/11)
2. DN dated 18/04/2012 relating to late payment of Invoices of FY 11-12 being booked in books of FY 12-13.Whether Prior Period or not? (Note: Payment of these invoices of FY 11-12 was made on 18/4/12)

Rupesh Jain

Rupesh Jain (Expert)
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12 June 2013 on 1. this is prior peroid exp.

2. this is for 2012-13

due to interest on late payment is finacial exp.

Roshan A

Roshan A (Querist)
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12 June 2013 Thanks
Regarding the answer to query no 2 can i book interest from the due date of making payment of concerned invoice to 31/03/2012 as prior period and book remaining in current years financials as the company knew that such liability would arise later and didnt provide for any provision as on 31/03/2012??

Rupesh Jain

Rupesh Jain (Expert)
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12 June 2013 yes if predecided with vendor that we pay intt on late payment then
you have to provide on dt 31.3.2012

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