Accounts

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 September 2011 y is it that in case of dissolution cash balance is transferred to cash account but in absorption it is transferred to realisation account ?

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

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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15 September 2011 yes ir is correct

Querist : Anonymous

Querist : Anonymous (Querist)

15 September 2011 dat is the treatment but am asking the logic behind it

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CA Sumat Singhal

CA Sumat Singhal (Expert)
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17 September 2011 In case of dissolution cash ac is opened separate for proper distribution of cash to various parties while in case of absorption realisation ac a type o notional ac is opened to transfer all assets and liabilities and in this regard cash also trfd treating it as an asset. So no need to open a separate account. ?
Hope above ans will help u.
Regards,
Sumat Singhal.

CA Pushpendra Gaur

CA Pushpendra Gaur (Expert)
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29 September 2011 well it is very simple in case of absorption the cash balance is being taken over by the absorbibg entity where as in case of dissolution, the amount is to be distributed among share holders and no cash account is opened, it is just prepared