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Is reversal entry permitted

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CFO
1347 Points Joined March 2020
Hi,

Is reversal entries in accounts permitted under companies act instead of deleting or modifying an accounting entry ?
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On 18 June 2022 at 22:19 Report
Replies (37)
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CFO- at NHTF
58280 Points Joined August 2012
Yes. It is your discretion to give effect to the transaction
4 Reply
On 18 June 2022 at 22:22
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CFO
1347 Points Joined March 2020
Is it permitted under companies act ?
4 Reply
On 18 June 2022 at 22:23
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CFO- at NHTF
58280 Points Joined August 2012
Companies Act has not specified such reversal of transactions. But you can follow you can follow your own internal control mechanism
3 Reply
On 18 June 2022 at 22:24
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CFO
1347 Points Joined March 2020
So it is not wrong to reverse a wrong transaction and pass the correct entry
4 Reply
On 18 June 2022 at 22:25
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CFO- at NHTF
58280 Points Joined August 2012
Few accounting ERPs don't allow to modify or delete the accounting entry. So there is no wrong in doing so
3 Reply
On 18 June 2022 at 22:27
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CFO
1347 Points Joined March 2020
But no where in companies act specify about reversal of transactions
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On 18 June 2022 at 22:28
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CFO- at NHTF
58280 Points Joined August 2012
You can treat it as generally accepted accounting policies/ principles.

That might be your internal control
1 Reply
On 18 June 2022 at 22:29
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CFO
1347 Points Joined March 2020
When we know it is wrong then why we have to reverse it instead of modifying it
1 Reply
On 18 June 2022 at 22:30
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CFO- at NHTF
58280 Points Joined August 2012
You may ask this to your employer: top management
1 Reply
On 18 June 2022 at 22:30
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CFO
1347 Points Joined March 2020
Why they have not given option to modiy or delete the accounting entry ?
1 Reply
On 18 June 2022 at 22:31
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CFO- at NHTF
58280 Points Joined August 2012
We will not be knowing what is happening in your company and why it is happening. Better discuss with your internal depts
1 Reply
On 18 June 2022 at 22:32
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CFO
1347 Points Joined March 2020
So that means it is not as per companies act . There might be other motive
1 Reply
On 18 June 2022 at 22:33
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CFO- at NHTF
58280 Points Joined August 2012
Possibility is there
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On 18 June 2022 at 22:33
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CFO
1347 Points Joined March 2020
But I have asked all staff they said that they don't know and programmer has designed it
1 Reply
On 18 June 2022 at 22:34

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