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Company bank account

17 May 2021

what if a company has bank account with balance and has stopped its operation long ago and has no details regarding the bank account.What shud be the treatment in books by the management? how shud they treat it in accounts?

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4 Replies

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 17 May 2021

write it off as a loss if you know the accurate number. If you don’t know the amount, try and track opening and closing balances.

Poornima C (35 Points)
Replied 17 May 2021

Ok thanks what is my doubt is if there is balance in bank it is an asset.They are not operating and amount is not withdrawn because there is no account number details.But the balance in company name and account still exists.if we write off it's like amount is not recoverable ever.

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 17 May 2021

If you know noise banking, transfer the old amount into new account like this

New current bank a/c

To Old bank a/c

if you can’t remember the old account

Write off balance a/c (income statement)

To Old bank balance a/c

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CA Raj Doshi (Practising CA) (8733 Points)
Replied 17 May 2021

It is a material item. The management cannot just write off a bank balance quoting non operation. One must take help of auditors, previous IT returns. If you know the bank, you could still ask the person to track by way of a lookup by way of Company PAN. Wouldn't it be a direct case of fraud on the company if you later on come to know that the bank balance was withdrawn by way of a cheque from an employee with a forged signature or something. Also, any credits to the account by way of tax refunds, duty drawback etc being the income of the company has been looted by an unauthorized personnel. However meagre the amount, it is a material item of the financial statement.

Regards
CA. Raj Doshi

2 Like