Query:Issue of cheque in sufficient to fund

Dear all,
One of my client, a private limited company, has issued a cheque dated
28/01/2013 for purchase of a property. But till date(i.e.9th April) the
party has not issued the cheque.
On the date of issue the cheque, the client is having sufficient fund but
towards the year end, the fund used for separate purpose & on 31st march,
2013, bank balance shows negative figure(taking into consideration the
pending cheque amount).
The agreement has been prepared & the cheque amount mentioned there.
The question is whether the client can show negative bank balance as on
31/03/2013 ?
What recourse can be taken in this case ?

Thanks & regards,
CA Umes Kejriwal
9836431715/9051016948
Reply1
There is no problem in showing the negative balance in bank Account. If you
are so wary of the situation append a note explaining the same and the
reason for difference with the actual balance as per bank statement.

PIYUSH CHIRANIA
PIYUSH CHIRANIA & ASSOCIATES 
Reply2
Bank balance can never be negative unless there is OD sanction by the bank.
Further, Notes cannot substitute Accounts.
JNGupta
9331022920
Reply3
Bank balance can be negetive even without a sanctioned limit. The credit
balance should be shown on teh current liabilities as Book OD. There is
absolutely no problem with that.

DP Ghatak, Durgapur
9434474982 

Reply4
I am of the opinion that it would be a 'Current Liability' and not a
negative balance in the 'cash and bank balances'. However it is clearly
unsecured, the creditors have moved from one group to another.
Venu &Vinay


Reply5
Bank Balance as per Client's Bank Book can be negative without a sanctioned   limit and may be subject to
BRS. This is simply a Book Overdraft and there is no problem with it. This is based on practical situation .

CA. A.K.De