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ERROR IN PREVIOUS YEAR'S BALANCE SHEET!!

This query is : Resolved 

What can be done to account for the errors made in the previous year's auditted balance sheet?
If the balances of sundry debtors, creditors , bank balances are wrong how can it be rectified in the current year?

The errors in last year balance sheet can be rectified in current year by passing rectification entry in the opening . But the real issue is this that on passing such entries whether any net difference in the contra entry will arise .If yes , what will be the effect .This depends on facts of the case.

Please see the effect on the profit & loss account in which the effect to that extent shell be disallowed and taxed as prior period expenses or incomes under income tax act



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