Writing-off expenses

Save Share

This query is : Resolved

anthony (Querist)

26 January 2009 How do you write-off expenses. For Eg., expenses incurred in the year 2005 & 2006. Audit is done in the financial year 2008. Can these expenses incurred in 2005 & 2006 be writen-off in the financial year 2008. If YES, what is the procedure and what journal entries to be passed? Also, what is the impact on Balance Sheet and P & L Account? OR How does it affects BS and P&L account?

Thanks

Deepak Agrawal

Deepak Agrawal (Expert)

26 January 2009 Yes it can be written off... If it was not written-off by-mistake in earlier years, then it should be shown under "Prior period items" on face of P/L A/c... There is no procedure as such... It should meet the authorization process defined in the entity...

JE: Exp ... Dr
To Cash Bank...

Note: I understood ur query as though u are asking for items left un-written off by-mistake...

anthony

anthony (Querist)

27 January 2009 Thanks for your reply Sir, however, if the expenses are written-off in the current year will the profit of the curent year be affected or reduced by that margin. Please reply...

Deepak Agrawal

Deepak Agrawal (Expert)

27 January 2009 Yes ofcourse. Profit will reduce after writing off.

I think, U should not be asking this wuestion whetehr profit will reduce by booking the expense. Plz do not take it personally

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now