Rajendra Sewda (none) 26 June 2019
Current Bank A/c Balance as per bank statement is Rs. 100,000 Dr.
Since Cheque issued but not presented for payment of Rs. 49,00,000 and hence bank balance in books of Accounts is Rs. 50,00,000 Cr. & Reconciliation is prepared.
Since current a/c balance having cr. Balance even no credit facility is allowed by bank, then whether these transactions/book balance are acceptable or this has be rectify since we are understating creditors by issuing cheque entry.
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Raj C Doshi (Practising CA) 29 June 2019
If after passing 49 lakhs entry,bank balance goes credit in books of accounts then it is a case of bank balance overdrawn. This shall be allowed in financials only if there is a credit facility and the amount shall get cleared by bank.