Writing off of fictitious assets
This query is : Resolved
keerthi g kulkarni
(Querist)
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
CA CS Amit S. Kedia
(Expert)
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
- Late Filing Fee Waiver for Q1 Form 144 (Earlier 27Q) – Transition to Income-tax Act, 2025
- Form 144 TDS Return Validation Error – Mandatory Fields
- Advances to related party
- GST ITC as per notification 12/2023- central tax
- Urd purchase entry in tally prime
- LLP audit and disclosure
- How do you manage client document collection and follow-ups in your CA/CS practice?
- Capital Gains Tax on Inherited Mutual Fund
- Form 144 TDS Return Validation error
- Capital gains in IT returns
- Rent agreement of House of deceased person
- Ito add credit side of bank
- Employee secondment
- Subject: Legal Remedy for Removal of Income Tax Demand for AY 2024–25 – Charitable Trust
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Tally: Imported bank entries do not show up in manual reconciliation
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
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
