12 December 2014
I have query. I prepared balancesheet for current month. I found current month balancesheet value is less than last month. My boss said this can never happen balance sheet value never reduces
12 December 2014
Assuming that you are Mentioning that the Gross Total of Assets & Liability ( B/S Toatl have Reduced Compared to Previous Period B/s ) Than Your Boss is not always correct, B/s Value can be lower/Lesser than prevoius B/s E.g Opening B/s has Liability say Crs at 100000/- & Drs at 90000/- & Cash at 10000/- Your B/s total in this case is 100000/- Now consider you have Paid your Creditors Rs 7000/- So your Crs will become 93000/- Hence your Liability Side Total is 93000/- & Asset side Drs ( Assumed No Recovery Done in this period) will Remain at 90000/- & Cash since paid to Crs Rs7000/- Bal is Rs 3000/- This brings your Asset side to 93000/- See the Balance Value is Reduced. Hope your Query is Solved, Then Go & show your Boss & Clear his Misconceptions
CAclubindia
