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aCCOUNTING EFFECT OF........

Mukund (article) (24 Points)

27 August 2010

WHAT WULD BE PROPER ACCOUNTING ENTRY FOR THE FOLLOWING CASE :

If creditors for Fixed Asset is to be written back, then corresponding effect shoulb be given to P&L account or Fixed Asset?

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15 Replies

ravi. (article trainee) (424 Points)
Replied 27 August 2010

well the corresponding effect will be given to Fixed Asset..

CA Harbinder (CA ) (1245 Points)
Replied 27 August 2010

AGREED WITH RAVI

Govind Rathore (CA Final) (543 Points)
Replied 27 August 2010

corresponding effect can be given to P&L provided, provision for creditors account is created, if not the effect should be given to Fixed assets....

SUMIT MISHRA ACA, ACMA (Executive) (124 Points)
Replied 27 August 2010

who made provision for creditors there is no such provision it will be passed against fixed assets

aditya (1) (44 Points)
Replied 27 August 2010

It would be net amount that is after considering the depriciation if it is due to mistake taking else entire amount would be added to fixed Asset as it is change in accounting estimate

(Guest)

In my opinion if Asset is not depreciated, then w/o against that fixed asset.

If depreciation has been provided in previous years, write back the amount of depreciation to P&L(Cr.) and bring back the Asset to its original value. Now Write off Creditors of Fixed Asset to Fixed Asset. Assumed that Asset is taken back by the creditor on some problem.

punit (CA final) (290 Points)
Replied 28 August 2010

u have to give effect to fixed assests....coz creditor waiving some amount mean fixed assests have lesser cost...you should give effect to fixed assests

AAKASH KASHYAP (AUDIT ASSISTANT) (25 Points)
Replied 28 August 2010

When u purchased the fixed assets from the party , u had debited the assets and credited the party.

Therefore now a reversal entry has to be passed cosidering the depriciation factor

Mayur Arora (CA Final) (295 Points)
Replied 28 August 2010

Agreed with Zamri Malik

Sandeep Yadav (CA Final ) (67 Points)
Replied 28 August 2010

hi....there is some critical mistake with the opinions....

You can treat like it....

Condition No. 1

If creditors is giving the discount and in the same year, then you would take effect into Fixed asset account.

Condition No. 2

If you are writing off the creditors, as there is no discount providing by him or no one demanding/claiming the dues then you have to credit the same in P & L account.

In condition no. 2, how you can credit the fixed asset account, while there is no impact on fixed asset value due to non claiming the dues by Vendor.

(Guest)

Originally posted by : Sandeep Yadav
	hi....there is some critical mistake with the opinions.... You can treat like it.... Condition No. 1 If creditors is giving the discount and in the same year, then you would take effect into Fixed asset account. Condition No. 2 If you are writing off the creditors, as there is no discount providing by him or no one demanding/claiming the dues then you have to credit the same in P & L account. In condition no. 2, how you can credit the fixed asset account, while there is no impact on fixed asset value due to non claiming the dues by Vendor.