Previous year adjustment

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If you've overbooked expenses in a previous financial year and the accounts are now closed, you'll need to make an adjustment in the current year. The suggested accounting treatment involves debiting the Cash Account and crediting an Errors & Omissions Account, especially if cash flow is involved in rectifying the error.

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(Querist)
02 February 2023 Hi,
Please suggest accounting treatment in Current Year for expenses which excess booked in previous year.
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Shailendra Jaiswal,

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Shailendra Jaiswal, (Querist)
02 February 2023 And Previous year accounts is closed
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Manish

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Manish (Expert)
02 February 2023 If cash flow is involved:

Cash A/c Dr.
To Errors & Omissions A/c
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