Kollipara sundaraiah asked 4 years ago
Sir,
Iam finalization of accounting books in proprietory concern.cash on hand balance is a very low.how to increased of cash on hand reason for proprietor personal drawings accounting entries not booked and some small creditors written off purpose.
Any limit of cash on hand at end of the finicial year( March)
Bhashkar T. answered 4 years ago
Dear sir,
As per your concern, you want to increase cash in hand for your proprietorship concern. Further you want to know limit of cash in hand at the end of financial year. Please note that there is no limit for minimum or maximum cash in hand at the end of financial year. But you must have detail of source of income as an explanation for huge cash in hand. Even you may decide to have nil cash balance at the end of financial year and deposit all money to your bank account on 31st march. Hence there is no limit for cash in hand.
Further drawing entries are no booked by you. Please book all accounting entries including drawing and creditor/debtor written off.
If you still want to increase your cash in hand, you may take following actions;-
- withdraw money from bank account or if no money in bank account also then take a loan from bank for business expansion and withdraw money.
- Increase your cash sales.
- Increase your effort to recover money from from debtors. (credit sale)
- Borrow some money from any of your friend for business expansion.
- Reduce blockage of money in inventory. You may move towards Just in Time approach.
- you may defer payment to your creditor on request.