Question

An account should be treated as 'out of order' if the outstanding balance remains continuously in excess of the sanctioned limit/drawing power for……

Q: Answer- An account should be treated as 'out of order' if the outstanding balance remains continuousl...

An account should be treated as out of order if the outstanding balance remains continuously in excess of the sanctioned limitdrawing power for 90 days. In cases where the outstanding balance in the principal operating account is less than the sanctioned limitdrawing power, but there are no credits continuously for 90 days as on the date of Balance Sheet or credits are not enough to cover the interest debited during the same period, these accounts should be treated as out of order.