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Unadjusted Rent Deposit of Previous year

17 April 2020

How can a un- adjusted Security Deposit of a private limited company,received back in previous financial year can adjusted with?

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5 Replies

Eswar Reddy S (CFO- at NHTF) (58263 Points)
Replied 17 April 2020

Rent deposit should have been accounted in the long term /short term loans & advances.

There will be debit balance .

On receipt of deposit credit the ledger.

Where it was accounted initially when the payment was made for rent deposit??

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rutuja prabhune (107 Points)
Replied 17 April 2020

It was correctly accounted under current Assets-Deposits,but payment is received in F.Y. 2018 but does not seem to be adjusted with

the proper account head,so its still reflecting in balance sheet

Eswar Reddy S (CFO- at NHTF) (58263 Points)
Replied 17 April 2020

Then check out for which ledger it was accounted when the deposit was received.

Same amount will be there with credit balance unless it was charged to profit and loss Account

rutuja prabhune (107 Points)
Replied 17 April 2020

Yes Sure,will check it out,but how should it be adjusted this year, as won't be able change the previous year balance sheet now.

Eswar Reddy S (CFO- at NHTF) (58263 Points)
Replied 17 April 2020

Best change the previous year.

There will be another ledger with same amount with credit balance.

Pass an adjustment entry..

Debit the credit ledger
and credit the unadjusted rent deposit.

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