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Unclaimed supplier payments

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sai ram

article trainee

30 Points Posted on 23 April 2014

In an organisation amount of Rs.1,66,280 belongs to 3 suppliers

Organisation have alredy issued cheque for this amount in 2010

But the supplier did not claimed the amount

Now it was lying in Time bar cheques

Upto how much time it sholud be maintained under that account

what is the accounting tratment for that funds

Thanks in advance

Replies (1)

Although period of limitation is 3 years,i.e the supplier cannot claim any legal remedy after 3 years,however companies do not write off the amounts for two reasons. First it becomes taxable u.s 41(1) and secondly due to courtesy. Its your wish,either write off the amount wholly as 3 years have passed or just carry them in books.