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Non Integrated cost accounting system
Costing
Greetings, For prepaid OHs it is said in course that we have to transfer the prepaid amount to GLA A/c but why cant we just have the same as a closing balance(debit balance) instead of transferring it. Kindly explain.
Answers (6)
If it's under recovery then u can either carry forward it Or charge to profit and loss If in question already opening balances are there for overhead account or means last year under or over recovery they carried forward So this year also u carry forward
Harshitha Kalidindi
If it's under recovery then u can either carry forward it Or charge to profit and loss If in question already opening balances are there for overhead account or means last year under or over recovery they carried forward So this year also u carry forward
Thanks for the reply Harshita but my question was even if we transfer the prepaid expense from OH to CLC A/C eventually we'll again transfer it to OH A/C in the subsequent period and charge it so why cant we alternatively just leave the prepaid as balance in OH A/c and charge in next period.
Harshitha Kalidindi
U can leave as I said
Thanks a lot! In course it's transferred to a different account na that's why I had to confirm.
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