Query on accounts

Dear Siva Babu,

          If the account is operative and continous for 2 to 3 years, u can reverse. Howeer, if the account it closed and, if u  r showing a reversal, that will show the expense account with a credit balance. So its better to show it as income in such cases

Accounting Standard 5 Prior period items will be appliabe if the reversal of income due to error or omission happened in the previous year

Agreed with Mr. CA.G.Muguntha Narayanan

According to AS 5.................... Any error occur in transaction during the previous years then should be seperately disclosed under Prior period Income or Expense....

The reason behind that is this error is due to the mistake occur during the previous years which has been rectified during the year and effecting the current year's profit