Non clear of cheque

This query is : Resolved

Ravi Kumar Rajgaria (Querist)
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20 May 2008 A cheque was issued on 01.12.08 for Rs. 10000/- for Travelling exps.Till 31.05.08, same cheque does not cleared from Bank.Now following entry passed in Books on 31.05.08.
Bank A/c Dr 10000
To Travelling Exps A/c 10000
But assume, during the year other Travelling exps made by the company will be only 4000/-. Now there is a credit balance of Rs. 6000/-
What will be the treatment?
Should this entry haveto pass on 31.03.08 because the expenses relate to last year?
What about the FBT paid in last year?

R.V.RAO

R.V.RAO (Expert)
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20 May 2008 1.WHILE THE DR. WAS GIVEN TO TRAVELLING EXP. ON 01-12-07( IT COULD NOT BE 01-12-08 AS STATED IN THE QUERY ), THE CREDIT COULD HAVE BEEN GIVEN TO THE PERSON TRAVELLED(OR WHO SUBMITTED THE TRAVEL CLAIM ).
2.THEN DR.PERSON AND CR. BANK FOR PAYMENT MADE ON 01-12-07

3. ACCORDINGLY, ON 01-06-08(CHEQUE BECOMES STALE AFTER 6 MONTHS) SINCE THE CQ. WAS NOT ENCASHED,DR. BANK. CR. PERSON

TRAVEL EXP. SINCE WERE ALREADY AND ACTUALLY INCURRED ,DR. TO TRAVEL DOES NOT GET AFFECTED IN JUNE 08.

WHAT YOU CAN DO NOW ( I PRESUME AUDIT AND FINALISATION OF ACCOUNTS IS NOT COMPLETED YET)PASS VOUCHERS AND MAKE ENTRIES AS PER ITEM 1,2,3 ABOVE.
I HOPE SOFT WARE ALLOWS CHANGES AND CANCEL ORIGINAL ENTRIES IN SYSTEM AND PASS FRESH ENTRIES.
THIS WAY, FBT, AND ANY ACCOUNTING PROBLEMS DO NOT ARISE.
R.V.RAO

Ravi Kumar Rajgaria

Ravi Kumar Rajgaria (Querist)
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21 May 2008 Sir,
What happen to the credit balnce of party in this year if no new/revised cheque to be issued further?
Are you sure that no reversal entry have to made in 31/03/08?