Dues of trade creditor & debtors

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This query is : Resolved

Zafarulla Sattar Khan (Querist)

30 June 2013 In my company Balance Sheet as on 31.3.2013 i have Trade credit balance of Rs 2 Cores. and simultaneously Trade Debtors (Receivable)
is also have Rs 2.10 Cores.
My Question:
1.Can I approach My Trade Debtors to Clear his balance by Paying my Trade Creditor directly.
2. Can I Pass Journal Entry by taking a letter / Declaration by Trade Creditor & Trade Debtors.

other wise what will be the procedure to close these two ledger account ?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

30 June 2013 You can do so if both the groups agree in your favour. You have to create sufficient evidences to substantiate the transaction.
JV can be passed on the basis of documentary evidences available with you.
.

Zafarulla Sattar Khan

Zafarulla Sattar Khan (Querist)

30 June 2013 Thank you Sir.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)

30 June 2013 Agree with learned expert. Documentary evidence showing that both the trade creditors and trade debtors have agreed to this will be required to pass the Journal entry.

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