Writing off of fictitious assets
This query is : Resolved
29 May 2012
Hi all
As a statutory auditor of a pvt ltd company I want to know accounting treatment of the fictitious assets say receivables waived off by debtor , pyts made to vendors in advance which co could not recover now presented in the B/s from past five years. The amount is huge of around 55 lakhs (debit).
Can any one suggest how the same is to be dealt with and tax effect thereon & relevant Company Act provisions applicable (if any).
Replies could be mailed to kirtigkulkarni@gmail.com
As a statutory auditor of a pvt ltd company I want to know accounting treatment of the fictitious assets say receivables waived off by debtor , pyts made to vendors in advance which co could not recover now presented in the B/s from past five years. The amount is huge of around 55 lakhs (debit).
Can any one suggest how the same is to be dealt with and tax effect thereon & relevant Company Act provisions applicable (if any).
Replies could be mailed to kirtigkulkarni@gmail.com
29 May 2012
If the balances in debtors and advance given to vendors are from several years and is not recoverable any more, then you can write off such amounts in the books of accounts.
The same can be claimed as deduction under section 36(VII) of income tax Act.
Accounting treatment for the same is as follows-
1.Sundry Balances Written off Dr
To Party's A/c
2.Bad debts A/c Dr
To Advance givem to vendors A/c
The same can be claimed as deduction under section 36(VII) of income tax Act.
Accounting treatment for the same is as follows-
1.Sundry Balances Written off Dr
To Party's A/c
2.Bad debts A/c Dr
To Advance givem to vendors A/c
Message likes :
2 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Reporting Income under Section 44ADA
- Itr 1 processing
- ITR 2 Short Term gain & Long term gain
- Off Market debit and credit transaction
- ITR returnFY25-26
- INCOME TAX ON REDEVELOPEMENT OF FLAT
- Short Term Capital gain on shares bought and sold after 2018 onwards
- Share accounting-->fifo - capital gain - period as per fifo?
- ITR validation error - Balance sheet is not filled
- ITR 1: Details for showing Exempt Income
- Registration as Authorised Representative of minor
- Article ship defecit
- Bank Accounts in Balance Sheet for ITR 3
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- Difference in tax comparison report
- Gst invoice numbering and delivery challan numbering
- Sales amount in Gstr1
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
