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Urgent query

ANOOP (student) (428 Points)

06 March 2013

I have two questions

one what is meaning of negative balance of bank appearing under current assets in Tally

which of the items of Trading and Profit and loss account can be extremely important for comparison for one year to another year. for example

sales

and like that what else??

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4 Replies

praveen (Chartered Accountant) (6971 Points)
Replied 06 March 2013

negative balance may be due to wrong classification of bank overdraft as bank account in tally.

Gross Profit percentage over the years are very important. In case of difference better prepare reasons for the changes.

Ratio of certain expenditure to sales or expenditure to total expenses could also be a good find.

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(Guest)

Some times if we issue postdated cheques, then also negative bank balance may appear .

In such case reconciliation statement can be taken from Tally too for refernce.

CA Bhargav Nathwani (CA in Practice) (8307 Points)
Replied 06 March 2013

Agree with both the answers.. If you avail facility Of CC so it may be negative n overdraft also reason for negative cash n bank balances.. As per your 2nd question its up to your accounts r imp..in project finance n all regarding matters your net worth is imp element..or if you wish for loan for promotion of sales then your sales figurs r imp..so its depend upone situations..