Expense

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Gurjeet singh

Gurjeet singh (Querist)
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02 December 2014 How to treat expense paid for previous years in Books of current year

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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02 December 2014 earlier u must have passed entry as:
exp a/c......
to provision for exp a/c

so this year when u make a payment u need to book this entry:

provision for exp a/c......dr
to cash / bank a/c

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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03 December 2014 It should be booked under the head of prior period expenses, if no provision has been made earlier. And the same should be disallowed under income tax act.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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03 December 2014 prior period exp comes only when there is a discovery of mistake or error in item of profit or loss.
if in current year as a result of mistake in preparation of financial statments in one or more of previous year.

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