If cash/bank is not a taken over asset, would it be taken into Realisation A/c? The confusion is that in some questions, it is taken in the Realisation A/c while in some, it is not taken into realisation; and instead, a cash/bank a/c is opened with the opening balance. Please Help.
1 Replies
vinod jain
(Learner)
(40 Points)
Replied 21 May 2011
Dear Nishant,
Whenever the purchasing company does not take over cash balance, it is for a purpose. It may be intended to pay off the liabilites which are not taken over by the purchasing company of to pay the realisation expenses.
The answer to your second question that eventhough cash is not taken over it still appears in realisation account is that the cash remaining after paying off the liabilities or realisation expenses may be taken over by the purchasing company
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