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Adjustment accounting entries

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Kollipara Sundaraiah

B.com

3025 Points Posted on 05 February 2021

i.t.assess un secured loan and Sundry debtor outstanding balance as on 31-3-20 in books.
unsecured loan balance Rs:4 lacs
Sunday debtor balance Rs:5 lacs.
question:
Assess unsecured loan balance amount Rs:4 lacs transferred to Sundry debtor account adjustment f.y.20-21 allowed and accounting entries passed in books.

Replies (2)

Quick Summary

This discussion explores the accounting treatment for transferring an unsecured loan balance of Rs. 4 lacs to a sundry debtor balance of Rs. 5 lacs for the financial year 20-21. It clarifies that such an adjustment is permissible if the parties involved are the same, allowing for a net receivable figure. However, if the parties differ, it could distort the balance sheet and present an inaccurate financial picture. Consent from both the debtor and loan holder is advised.

durgesh

student

222 Points Posted on 06 February 2021

Adjusting wont get u in a problem unless the party concerned is the same party...otherwise it would be such that u are trying to distort books if parties are different.... for eg

if same party
then we can show net recevable of ruppes 1 lac

but if diff party
if would not show a true fair picture of ur balancesheet
it would show as if u are not paying 4 lac and receving less money also in future whereas ur receiving 5 lacs ...adjusting wont serve any purpose