Book debts accounting
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
25 April 2014
I am a banker.A cash credit limit is sanctioned to our client against book debts o/s upto 90 days. But in his latest b/s bookdebt are shown as Nil. His accountant is clarifying that they have adopted new practice of accounting in which they have removed the bookdebt from the asset side and as a double entry book keeping they have deducted the debtor amount from the sales figure. He further is stating that there are sufficient debtors' o/s as on the date of the B/s but since they do not want to add them in sales to save income tax. If they show the debtors in asset side they have to add them in sales also. please clarify is there any prevalent accounting practice.
Nikhil Kaushik
(Expert)
26 April 2014
it is a prevalent practice of FRAUD. kindly cancel the limits and report the matter to RBI as a fraud.
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