Credit balance in sundry debtors-crediting to p&l

This query is : Open

anilwyd (Querist)
Follow

09 April 2012 Hi,

In one T?B which I am finalizing now; there are lot of sundry debtors accounts with credit balances [ reason includes- giving discounts, excess payments etc.] there is a rare possibility that we will call and pay back the same to sundry debtors.

What is the recommended accounting treatment ?
Is there any 3 year criteria involved?
Any AS deals with this?

Ours is a listed company.

Shall I credit the said credit balances to P&L ?

Reagards
anil.india

CA Rakesh Goenka

CA Rakesh Goenka (Expert)
Follow

09 April 2012 Listen its depend upon amount because if credit balance is huge then company should carry forward the Credit balance of Debtor for 2 year and if within 2 year any debtor did not ask for anything or any further transaction did not happens with same customer within these two year then Debtor should be write off in P/L......entry should be I) Debtor A/C..........DR.
TO, Debtor write off A/C
II) Debtor write of A/C .... Dr.
TO P/L
and IF amount is not that huge then Company can write of entire amount this year in P/ L a/c

CMA Ashutosh Kumar Gupta

CMA Ashutosh Kumar Gupta (Expert)
Follow

09 April 2012 Following is recommended:
* Do ageing of Credit Balances
* Do marking of open amount and reco. to sure being exclusive debtors, as feasible
* Obtain Customer Balance Certificates as is prescribed as an accounting norm.
* Unclaimed balances to be written back thereafter per company norms/sop.

anilwyd

anilwyd (Querist)
Follow

09 April 2012 Credit balances range from Rs 10 to Rs 90000 and is less than 3 years balances. Party does not know and will not claim the same.
Total turnover is about 5 Cr.( about 50 parties accounting to approx Rs 4 lacs)

regards

anil

Vishal Sharma

Vishal Sharma (Expert)
Follow

10 April 2012 On the basis of prudence concept probable loss must be provided in books but income is accounted if it 95 to 100% sure will accrue in that year. Therefore make sure that party will not claim the amount and if there is possibility of claiming the amount by party at the time of preparing books of accounts then defer it to future years.

Also to obtain balance confirmation certificate from customer.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

Aniruddha Mody

Rampal Saini

Jitin Aditya Kapur

Amirthalingam

George Innocent

Subscribe Now

Credit balance in sundry debtors-crediting to p&l

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA