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Old bank account to be introduced in financials

Michelle (Service) (297 Points)

20 August 2016

1 bank account was not shown in the Balance sheet of a proprietary firm for last 5 years. This year however, bank has deducted TDS on interest received on the bank account thereby reflecting the bank account in 26AS. How do we introduce this bank account in the financials? What would be the journal entries for the same?

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5 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160317 Points)
Replied 21 August 2016

Not good practise.

By the way what's the balance in the missed bank acc?

CA.Vinita Gupta (Deputy Manager- Finance) (2918 Points)
Replied 21 August 2016

You should account as Prior Period Item as per AS-5

nitin agrawal (work under advocate and chartered accountants) (29 Points)
Replied 22 August 2016

add old bank account by entry

bank a/c dr.

to capital a/c

narration- bank account adjusted.

Michelle (Service) (297 Points)
Replied 22 August 2016

Originally posted by : CA.Vinita Gupta
	You should account as Prior Period Item as per AS-5

Hi Vinita, Thanks for the reply

AS 5 requires recording Prior period items in Profit and loss account. However, in the query listed above, we have to introduce the bank account as an asset in Balance Sheet.