Payable - better strategy to deal

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Suppose in a balance sheet u see Rs. 560 as incentive payables standing in liability side but you cant trace it down and you want your audit report to be clean so how would you probably adjust the same. Explain with entry.
Replies (2)

Dear,

There are multiple ways to settle the aforesaid transaction, in the presence of ambiguities in your query.

 

1- Try to figure out whether the same is not due to some transposition error.
2- If the same is actually payable then pay the same to extinguish the outstanding.
3- Inspite of due diligence, if the same can not be ascertained then reduce the relevant account by a reversal entry.
4- Offset the liability by reducing the other head on the grounds that the same was wrongly recorded in that head.
5- Reduce the Incentive account by the similar amount hence expenditure will be reconciled with the payment.

 

Still there are other ways to settle the similitude transactions.

 

Best Regards,
Desperado

hey thanks desperado :)


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