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regarding negative cash in books

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Kumar Gaurav

Going...to be C.A soon...

1055 Points Posted on 28 June 2007

hi all,

i m maintaining accounts of a partnership firm and on 31-3-07 i found that there was negative cash balance in books in some dates. can u tell me what is the remedies for the same. what can i do for that?

and can i show unsecured loan in books if yes what is the procedure for doing the same i mean what documents is prepared for the same

thx

gaurav

Replies (4)

CA. A.K. MADHU BALAN

CHARTERED ACCOUNTANT

29 Points Posted on 28 June 2007

If there be any parters' drawings, post pone the date of drawings to a date when there is sufficient debit balance in cash account. If any cash outflow, say bulk payments, can be posted to any other date, try that also.

Prakash Popat

2371 Points Posted on 29 June 2007

Negative Cash Is not allowed under any circumstance,Do u have ever negative balance in your pocket,Rectify this with Cashier and Partner,ceo,md,concerned authority.somebody must lent money to spend.

RUDRA DATT

practice

62 Points Posted on 29 June 2007

PASS CASH RECEIPT ENTRIES BELOW 20,000 PER PERSON AS UNSECURED LOAN IN DIFFERENT DATES . LOAN CAN NOT BE TAKEN IN CASH MORE THAN 20,000.

Rajesh Bajaj

158 Points Posted on 30 June 2007

You can taken loan from partners but you have to sure that on which date they have withdrawn from their Personal bank A/c so first you to check Statement of bank A/c of Partner Personal Saving A\c