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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……

A 60 days Correct Answer Incorrect Answer
B 90 days Correct Answer Incorrect Answer
C 120 days Correct Answer Incorrect Answer
D 150 days Correct Answer Incorrect Answer
E 180 days Correct Answer Incorrect Answer

Solution

An account should be treated as 'out of order' if the outstanding balance remains continuously in excess of the sanctioned limit/drawing power for 90 days. In cases where the outstanding balance in the principal operating account is less than the sanctioned limit/drawing 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'.

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