FS of Banking

Accountancy

If OD of 2500 is already included in current account 97000, then why current accounts are shown 99500 in deposits instead of 94500. Why they are adding again ?

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Madhaan S

CA Final

★ 14K+

07-May-22 13:38

539

Answers (2)

Best Answer

Rs. 9,70,000 is the net credit Balance which is payable by the bank to their customers. This 9,70,000 is calculated by including the debit balance of OD's which is Rs. 25,000/-. Hence, for the purpose of presentation the debit balance of OD's is shown in the assets side of FS and the contrary effect is given by increasing the OD to actual credit balance which would have been 9,95,000 ( 9,70,000 + 25,000). In simple terms, the assets are pulled over and the actual liability without netting off is shown in liabilities side.

shalu Muthukumar

CA Final

★ 1K+

07-May-22 16:37

OD Is an asset aa it is give inadn u first include I liabilities and then od amt record in assets

Pandusml V

CA Final

★ 4K+

07-May-22 14:46