Accounting
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
02 August 2011
Mr X Has some investment which was not show by him in balance sheet.
and now he get some gain (interest etc) from investment...
so now what treatment to do with account for show mr x's investment in balance sheet& that income in pnl...???????
and now he get some gain (interest etc) from investment...
so now what treatment to do with account for show mr x's investment in balance sheet& that income in pnl...???????
02 August 2011
make entry now as investment and show the interest in p&l
03 August 2011
true agree with expert.
03 August 2011
Sorry experts I do not agree with you. Investment on assets side will increase the asset side what will happen to the liability side there will be difference to the extent of investment.
The correct way is to capitalise the investment by crediting to the capital account and debiting it to the investment in assets side. The interest part comes latter which can be shown on credit side of P & L a/c if it is received. If not then again P & L a/c to be credited and Investment to be debited.
Mind it if the assessing officer asks for the explanation than be prepared to either get you accounts re-opened for that year otherwise you might be taxed ion the investment for the year. If your investment is more than 10 years then you need not worry.
The correct way is to capitalise the investment by crediting to the capital account and debiting it to the investment in assets side. The interest part comes latter which can be shown on credit side of P & L a/c if it is received. If not then again P & L a/c to be credited and Investment to be debited.
Mind it if the assessing officer asks for the explanation than be prepared to either get you accounts re-opened for that year otherwise you might be taxed ion the investment for the year. If your investment is more than 10 years then you need not worry.
Querist : Anonymous
Querist :
Anonymous
(Querist)
06 August 2011
thank u sir,,,,
08 August 2011
B/sheet
Asset : Investment
Liability : Capital
P&L
Cr Income from interest
Asset : Investment
Liability : Capital
P&L
Cr Income from interest
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