1 bank account was not shown in the Balance sheet of a proprietary firm for last 5 years. This year however, bank has deducted TDS on interest received on the bank account thereby reflecting the bank account in 26AS. How do we introduce this bank account in the financials? What would be the journal entries for the same?
5 Replies
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(178238 Points)
Replied 21 August 2016
Not good practise.
By the way what's the balance in the missed bank acc?
CA.Vinita Gupta
(Deputy Manager- Finance)
(2923 Points)
Replied 21 August 2016
You should account as Prior Period Item as per AS-5
nitin agrawal
(work under advocate and chartered accountants)
(29 Points)
Replied 22 August 2016
add old bank account by entry
bank a/c dr.
to capital a/c
narration- bank account adjusted.
Michelle
(Service)
(297 Points)
Replied 22 August 2016
| Originally posted by : CA.Vinita Gupta | ||
 |
You should account as Prior Period Item as per AS-5 |  |
Hi Vinita, Thanks for the reply
AS 5 requires recording Prior period items in Profit and loss account. However, in the query listed above, we have to introduce the bank account as an asset in Balance Sheet.
CA.Vinita Gupta
(Deputy Manager- Finance)
(2923 Points)
Replied 22 August 2016
If the bank has balance and interest is earned you will need to account that too
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