In newly incorporated private limited company can directors can issue cheques(from his personal bank a/c) for advance payments to suppliers of machinery where bank account of the company is not opened and payment is very urgent due to time constraint..
now plz,,guide me that is it possible or not or any other way out,,, also the right accounting treatment for the same...
23 October 2010
Yes possible. It is consider to be unsecured loan.. and it should be capitalised is exps directly related to pur of machi.. and if it is prelimery exps then total amt should be charged to p&L and not 1/5th.. it is as per AS-26
CAclubindia
