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How to find funds missing?

Swati Gulati (none) (29 Points)

07 November 2019

My firm X purchased input worth 90L and made sales of 1.4Cr during Fy 19-20 till date. If our monthly expenses are 4L, and stock value is about the same, where can my funds disappear? I do nit see anything in my bank! How and where do i look for them?

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Rahul Singh Randhawa (CA Final Aspirant) (60 Points)
Replied 07 November 2019

There are some things which you should verify :-

1) It may be possibe that your firm has made credit sales and haven't received their money yet.

2) There can be a repayment of loan.

3) Any advance payment made to suppliers.

4) It is also a possibilities that your monthly expenses are not accurate. It could be more.

5) By looking at the data you have provided, Sales 140 lac - purchase 90 lac - expense 48 lac = profit 2 lac. I think you should check the stock valuation again. It could be a factor here.

6) We make P&L account on accrual basis. So the amount of profit you are seeing in your statemen of P&L is not necessary to be available in cash.

Note :- There can be other things too you can work out with the right amount of information.

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