We had sent consignment to parties via L/c's. the collecting banker with whom we have an account credited the same at full amount bur debited amount in respect of interest which it received less from the issuing banker. On taking up the case our banker has agrred to refund the same but till 31/03/06 not refunded. How will the same shall be same in accounts? Also, if some of the amount is not refunded, how it shall be treated in the books and for which year? Pl. comment.
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Accounting for Extraneous debits
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If the arrangement with the banker did not provide for those charges(which he has agreed to reverse), then in your bank a/c don't pass the entry for the same and let that amount be a part of bank reconciliation. In the next period if the Bank does not reverse the amount, then u can provide for the same, subject to applicability of AS - 5
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