15 December 2011
When does a cash credit account becomes overdue? also if the balances in the account for a month is above cc limit do we need to bring to notice of the management.
15 December 2011
CC a/c becomes overdue in two cases: 1) when full amount of Interest due is not paid & 2) when excess CC credit limit utilised in not settled in due period for which cc limit is granted.
EG. If cc limit is Rs. 1 Lac so:
1) Int levied at month end is not repaid by cash credit to that a/c then CC a/c becomes overdue
2)If outstanding bal is above 1 lac & amount utilised in excess of 1 lac is not repaid in credit period granted then a/c becomes overdue.
Balance in the account for a month above cc limit is need to be bring to management notice to settle it through cash credit to avoid penalty.
CAclubindia
