Internal reconstruction query
Meena Gupta (Article) (83 Points)
09 June 2014
Reconstruction a/c in internal construction debit balance hota hai ya Credit balance.....????
8 Replies
PSPSPS
(Practicing)
(1344 Points)
Replied 09 June 2014
No Hard & Fast Rule or situation that it should be only Debit or only Credit, It can be either ways.
It depends on whetehr you are getting surplus / Benifit on Your Reconstruction Activity ( i.e Entire deficit being wiped Off ) or still in Deficit ( Just Reduction of Deficit & Left with something ) You have to Trf the Dr Bal of P & L Account in B/sheet Given to Dr of Reconstruction Account
PSPSPS
(Practicing)
(1344 Points)
Replied 09 June 2014
No Hard & Fast Rule or situation that it should be only Debit or only Credit, It can be either ways.
It depends on whetehr you are getting surplus / Benifit on Your Reconstruction Activity ( i.e Entire deficit being wiped Off ) or still in Deficit ( Just Reduction of Deficit & Left with something ) You have to Trf the Dr Bal of P & L Account in B/sheet Given to Dr of Reconstruction Account
Meena Gupta
(Article)
(83 Points)
Replied 09 June 2014
On the above ground its same as Profit n loss a/c as judgment..?
Meena Gupta
(Article)
(83 Points)
Replied 09 June 2014
Thanks.. I have one query in Cash flow.. Profit or loss on Sale of fixed assets is operating or investing activities??
PSPSPS
(Practicing)
(1344 Points)
Replied 09 June 2014
No Hard & Fast Rule or situation that it should be only Debit or only Credit, It can be either ways.
It depends on whetehr you are getting surplus / Benifit on Your Reconstruction Activity ( i.e Entire deficit being wiped Off ) or still in Deficit ( Just Reduction of Deficit & Left with something ) You have to Trf the Dr Bal of P & L Account in B/sheet Given to Dr of Reconstruction Account
PSPSPS
(Practicing)
(1344 Points)
Replied 09 June 2014
Reduce it from Operating Profit & Take Entire Reciepts at Actuals from Sale of FA to Cash from Investing Activities
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