Account for expnsed incurred in previous fy claimd in currnt

Hi

 I am making accounts for a start up services company for it current accounting year.

There are many claims for cost of sales that were for previous financial year but claimed in current year. 

I want to adjust them in current year accounts as previous year accounts have been finalised and tax claimed.

How can I go about it?

Thanks in advance.

Replies (1)

Dear Upasana,

 

Refer accounting standard 5, issued by the icai link of which is given below: -

https://220.227.161.86/247accounting_standards_as5new.pdf

accordingly you should disclose the heads of accounts going to be adjusted this year separately from other accounting entries. For example: -

"Salaries

Salaries (for last year)"

              This is for the user of the financial statement to analyse that their were some mistakes or ommissions  in the financial statements of the last year which are adjusted in this year. Further the user can be able to measure the impact of the ommission or mistake in the current financial year, i.e., excess profit or deficit. In one word we can say separate disclosures in the financials.

Entries can be: -

Expenditure (for last year)       A/c           Dr.

       To bank/cash           A/c

 

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