DIFFERENCE IN THE BALANCES???????????

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Sindhu (Querist)
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29 September 2007 Hi,

If there was an error in the previous year’s Balance sheet in the debtors and creditors balance how to adjust in the current year. Basically the creditors are shown less than the actual creditors and the debtors are shown at a very high value. How to adjust in the current years balance sheet and give a double effect for the same?????????? I want a practical approach… please do tell me…

Ravikumar.G

Ravikumar.G (Expert)
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29 September 2007 If there is any material change as per AS 5 "Net profit or loss for the period, prior period items and change in accounting policies" the respective amount should be disclosed in the financial statements separately.

Sindhu

Sindhu (Querist)
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29 September 2007 ya thats what but how to be disclosed separately???? how do i give a double effect???? if i reduce the debtors .. where on the credit side to be adjusted.. is it to be routed through the capital account?? what in case of a company????/

Ravikumar.G

Ravikumar.G (Expert)
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30 September 2007 Sundry Creditors A/c Dr
Purchases a/c Cr

(The same should be disclosed as i stated earlier)

Sindhu

Sindhu (Querist)
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30 September 2007 by doing so i ll be changing the purchases as per the VAT returns of the previous year .. is that ok.. once this disclosure is made

Ravikumar.G

Ravikumar.G (Expert)
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30 September 2007 Obviously, the revised VAT return should be filed. The intimation should be given to the respective departments.(Ex: VAT, Excise etc)