Proprietary concern - Whether Cash Basis or Accrual
This query is : Resolved
CA Abhishek Jain
(Querist)
19 May 2008
Please guide me whether it is compulsory for proprietary concern to maintain their accounts on Cash basis ?
Thanks,
Abhishek Jain
Thanks,
Abhishek Jain
Reetika Goel
(Expert)
19 May 2008
No.
Proprietor may choose to use Accrual basis for accounting.
Infact, Accrual basis is more logical to use.
No.
Proprietor may choose to use Accrual basis for accounting.
Infact, Accrual basis is more logical to use.
19 May 2008
THERE IS NO COMPULSION ABOUT FOLLOWING EITHER CASH OR ACCRUAL SYSTEM -ON ANY KIND OF INCOME TAX ASSESSEE.
ONE MAY CHOOSE AS IT SUITS TO THE PARTICULAR ASSESSEE.
ACCRUAL SYSTEM IS BETTER AS IT IS FLEXIBLE AND MORE LOGICAL AND SUITS A TYPICAL BUSINESS UNIT IRRESPECTIVE OF THE FACT THAT THE BUSINESS UNIT IS BEING PROPRIETARY,FIRM/CO.
R.V.RAO
ONE MAY CHOOSE AS IT SUITS TO THE PARTICULAR ASSESSEE.
ACCRUAL SYSTEM IS BETTER AS IT IS FLEXIBLE AND MORE LOGICAL AND SUITS A TYPICAL BUSINESS UNIT IRRESPECTIVE OF THE FACT THAT THE BUSINESS UNIT IS BEING PROPRIETARY,FIRM/CO.
R.V.RAO
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