A/r set off against partners current account

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 April 2013 Can you please resolve my query?

Suppose for a company X has 2,00,000 accounts receivable from customer's for the last 2 years, so company file a case against the customer's for revert it back this amount and they have also decided to set off this receivable against partner's current account. is it possible to set off this amount in partner's current a/c? and after the set off company received this amount from client will it transfer to other income? or transfer to capital a/c ? as per management decisions

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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20 May 2013 In case of company there are no partners, they are shareholders. If it related to the partnership firm then the debts are incurred by the firm and accordingly it is to be written off as Bad debts and on recovery it is to be sown as bad debts recovery and credited to the Profit and Loss account. It cannot be transferred to Partner's Capital Account and at the time of reovery it cannot be sown as other income