if i maintain bank book of a company, by directly making entries from the BANK STATEMENT, and do not prepare any BRS.
is there any specification for such that i cannot, or the ITO may have any problem with that way of accounting.
plz highlight.
john (LEARNER) (549 Points)
09 May 2010if i maintain bank book of a company, by directly making entries from the BANK STATEMENT, and do not prepare any BRS.
is there any specification for such that i cannot, or the ITO may have any problem with that way of accounting.
plz highlight.
binit kumar jindal
(chartered accountant)
(129 Points)
Replied 09 May 2010
there are two way to make accounting
1 cash
2 mercantile or accrual basis
if u make whole account by cash basis then no problem
but if u make account by mercantile syestem then u have to make your qwn bank a/c .
Kalpesh Chauhan,
(Tax Assistant (Accounting Technician CA FINAL CS PROF. PROG. B.Com))
(8310 Points)
Replied 09 May 2010
Yes Mr. Binit is right
CA Shammi Prabhakar
(Managing Director)
(2076 Points)
Replied 10 May 2010
practically it's not recommendable for your co. if large scale transactions are occuring on daily basis . bqz you can't track all the transactions by referring bank statement only.. bqz.. some times bank statement do not reflect all the required ref. for identification of transaction...
for ex... let say.. if you paid someone by cheque .. and he has not deposited the cheque into bank .. than how can you track his account.. bqz he has 6 months time to deposit the cheque into bank..
CMA Arif Farooqui
(Cost Accountant)
(4798 Points)
Replied 10 May 2010
no problem if you are following cash basic accounting. normally accountants do this when a large no of cheque are bouncing of their company. but problem is what Mr. Shammi has mentioned.
sksrinivas2009
(Asst Manager-Accounts)
(44 Points)
Replied 13 May 2010
I agree with Binit and Shammi, U are prepared with ref of Bank stament, there is no control. The system will complete wrong. So that every body should follow the accrual basis method only.
Kalpesh Chauhan,
(Tax Assistant (Accounting Technician CA FINAL CS PROF. PROG. B.Com))
(8310 Points)
Replied 10 June 2010
CA PuRvI M!$rA
(-)
(2260 Points)
Replied 11 June 2010
| Originally posted by : binit kumar jindal | ||
 |
there are two way to make accounting 1 cash 2 mercantile or accrual basis if u make whole account by cash basis then no problem but if u make account by mercantile syestem then u have to make your qwn bank a/c . |
 |
totally agree with binit...
RAJU
(LEARNER)
(1089 Points)
Replied 11 June 2010
Cash system of account does not mean that you account the receipts and payments on clearance of cheques in the bank account. Ideally, the transactions are required to be accounted as and when the dues are settled. Accounting of Income on receipt of cheque and payment will be the appropriate way of accounting. There may be some transactions in the year end which might left unaccounted in the event of accounting the transactions based on entries in the bank statements.
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