Energy Refund

Energy Refund

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What is the best way of dealing with a large refund for overcharges from the last 3 years from an electricity supplier.

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By johngroganjga
09th May 2015 12:55

The simple answer is to put it in the bank and then spend it as you see fit. But maybe you are asking from another point of view?

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By Sherman Holter
09th May 2015 13:08

Sundry Income

It would depend on the sum(s) involved.

Unless it's a significant amount to justify opening up and repairing prior years, we have, in practice, just put these type of things to Sundry Income.

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By Euan MacLennan
09th May 2015 13:24

Negative expense

If the previous accounts were thought to be correct at the time, there is no justification to amend them in the light of subsequent events.

I would simply credit the refund to the electricity expense account wher you posted the (over)charges in the first place.

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By johngroganjga
09th May 2015 13:25

If the OP is asking about how to account for such a refund received by a business, I would credit it against the expense it relates to. I would not credit to sundry income because it isn't. It's a retrospective adjustment to an expense.

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