Yogesh (Business) (98 Points)
23 September 2013hello
I have small business and have recd Rs.14500/- advance from a XYZ company in march 13 and after some time the company was closed. How do i square off the accounts of XYZ company? In fact we have started making the goods as ordered by the XYZ company and so have incurred losses in that also.
Can i make a dummy invoice on XYZ or show cash paid to XYZ or what can i do?
Rajesh
(Service )
(7576 Points)
Replied 23 September 2013
Are you sure that the xyz co will not demand this money. If yes then treat this amount as Income.
Yogesh
(Business)
(98 Points)
Replied 23 September 2013
cant treat this as income as all income heads and taxes thereon are finalised. can i raise invoice or show cash paid or what of this type i can do?
Rajesh
(Service )
(7576 Points)
Replied 23 September 2013
If you raising an Invoice for this amount then you have to reduce the stock also. As per fact there are no stock movement
So if your can't take this in to income of this FY then transfer this amount in Advance from customer and show in B/S as liabilities.
Mihir
(Wealth Manager)
(5293 Points)
Replied 23 September 2013
If your accounts are already finalized, then let the balance of XYZ co, remain as it is in the balance sheet. You may write it back next year.
Anuj jain
(CA Final Student)
(163 Points)
Replied 23 September 2013
book it as ur income but also consider the losses u have incurred
CA Kumar Mukesh
(CA CMA FINAL and Advance Excel Trainer)
(6881 Points)
Replied 23 September 2013
In present case you have received some advances from XYZ in earlier years & presently selling your product in normal course of transaction. In that case, its advisable that, before giving any effect of Written Off balance balance reconciliation should be done between parties.
CAclubindia
