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Cash shortage

Jyoti Narang (Kkk) (1204 Points)

04 March 2021

if there is shortage of cash in books but in actual there is no such shortage then how to balance this cash in books as in actual there is no such shortage of cash.

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6 Replies

Naveen (student) (334 Points)
Replied 04 March 2021

It will be easier to say exactly what is the nature of business entity is involved in and type of entity i.e proprietorship or partnership. And why there is excess cash in hand than books. Otherwise simply Pass a cash brought in entry through capital account or cash sales etc..

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Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 05 March 2021

Originally posted by : Jyoti Narang
	if there is shortage of cash in books but in actual there is no such shortage then how to balance this cash in books as in actual there is no such shortage of cash.

This is accounting issue. Either you have not accounted cash collected from customers in books, or under-reported cash sales in books or excess reporting of cash expenses in books as against actual. Identify these and do necessary rectification.

Regards,

Manoj

Kapadia Pravin (17259 Points)
Replied 05 March 2021

Excess cash on hand , you may deposit in bank account. Source of cash is most important to establish.

Jyoti Narang (Kkk) (1204 Points)
Replied 05 March 2021

Yes excess cash is deposited in bank.but how to arrange cash in books now and how to brought cash by propreitorship firm.

Kapadia Pravin (17259 Points)
Replied 05 March 2021

Avoid such questions on open forum. Ask to your consultant.

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Naveen (student) (334 Points)
Replied 05 March 2021

There must be some source for the cash receipts. They won't come out of thin air right. If the source is cash sales, Debit cash and credit sales. If the source is some hand loan taken from relatives or friends, Debit cash and credit their respective names

But like Mr. Pravin said if u r Trying to hide something from books or something, avoid such questions in open forum. Either message privately or ask ur consultant