Rectification of error

A/c entries 205 views 10 replies

Dear friends 

               There is an error which occured in fy 16-17 of credit card expense the entry should have

marketing exp a/c dr           xxx

   to credi card icici              xxx

but due to incomplete information the entry someone did in 16-17 is 

suspense a/c dr                 xxx

  to credi card expense      xxx

due to above entry it showing opening balance by Rs xxx now in the fy 17-18. I located the error and make the entry by reversing suspense i.e

marketing expens a/c        xxx

  to suspense         a/c       xxx

there is two question arises

is my entry is correct or wrong ?

and one of my colleague telling me that this is the part of P/L  account so it shound not be carried forward in fy 17-18 as opening balance as far as i know it will hit in balance sheet in fy 16-17 in asset side of balnce sheet . plese rectify me 

Replies (10)

 you have pass 1st entry , because you do not the expense 

Suspense    A/c   Dr 

To credit card   A/c   Cr 

After  that  you sould  pass  following  entry  when you understood  the expense , 

Marketing  Expense a/c  Dr 

To suspense   A/c          Cr 

so suspense account will be closed  and  markting expense will be debited to P&L A/c 

when you  perpare  balancesheet  you have to clear all  suspense a/c ,should not  be carried forward 

 

thanks i got that  if it is in suspense then how would we consider whether it is which type of expenses, because it is in suspense  

and my 2nd question was that it would have arrised in asset side of balacne sheet in fy 16-17

am i right or wrong?

Marketing  expense  is an Indirect expense and will be debited to profit and loss A/c , NO qustion of showing in balancesheet . 

 

if it was not located whether which type of expese it was and remained supesen till preration fs in 16-17 and it was loacated in 17-18 after preparation of fs of 16-17 that it was marketing expenses then we would consider it indirect expesnse i tink....

it is a prior period item sir for the year 2017-18. so it is to be shown separately in profit and loss a/c.

First of check out the ICICI Credit card statement... Then You can get some clarity about the asset side of BS balance...

I already check the statement of icici credit card we made the payment for site marketing , my question is that one of our employee coudnt locate the excpense so he make the entry in pakcage in 16-17

suspense a/c dr 

 to credit card

but i now i located that expense is marketing expense 

and i made the entries

marketing exp a/c dr

  to suspense a/c

matter is closed because entry is right my 2nd questions was that 

we coudnt locate the suspense amount in fy 16-17 and fs statement is already prepared so my opinoion is whether

that suspense will be showed as in asset side of fs of 16-17 not in 17-18 and and it iwill not be showed as idirect expense in 16-17 because it is in suspense. and we loacated the suspense in 17-18 ..so am i right or wrong??

so i think brother prasad Nilugal told the right thing so i am satisfy with his opinion

If you are satisfied then no need any other Questions or Clarifications... Enjoy with that reply... GOOD LUCK

Thnaks  very much sir 

You are welcome brother with warmhearted  yes


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