Urgent pls..affect of journal entries...

One NGO was maintaining 4 separate accounts for different projects.For eg. A,B,C,D.

They were preparing separate financial Statements.During the audit of Last year, the audit pointed that,there is no  need of [preparing separate Financial Statement and that it should be merged.

This year our accountant prepared one balance sheet.When asked about B,C and D,s rceipts. He said He has passed a journal entry to B,C,D incorporating the Receipts and expenses in one go and hence it will not be reflected in the Income and expenditure statement but will be accounted for in the balance sheet but somehow I do not feel convinced. Our Audit is expected shortly expected..

Can any one throw some light on the journal entry my accountant briefed.. This is urgent please...

Regards 

Thanks in advance.