What is the procedure to transfer money from a liability head, to a fixed-deposit account?
What is a “liability head” ?
I work for a Housing society hence, when ever we collect maintenance charges, a certain amount of the amount gets accumulated under liability’s like Sinking funds, Major repair funds and so on… and all these come under liabilities.
Now, I would like to know how to transfer the funds accumulated under these headers to a bank account under Fixed Deposit.
You don’t transfer the funds under the header, you just re-allocate the funds held in the bank account.
Say the sinking fund is 12,000 and that is represented by 12,000 in the bank account.
If 10,000 of that bank account is then transferred to a fixed deposit.
Then the sinking fund 12,000 is now represented by 2,000 in the bank and 10,000 in the fixed deposit.
The sinking fund liability does not shrink (get spent) just because the funds are held differently.
Thank you