Can we accept payments and disburse it to sellers like an escrow from a current a/c?

[Karan Sidhu]

Hello members,

Can we accept payment from customers and disburse it to sellers later on like an ESCROW from a normal current account? If yes, then How do we show such transaction entries in our current accounts?

Advance thanks!!

[DR.MARIAPPAN GOVINDARAJAN]

In my view it is not possible. Other views are solicited.

AI Summary

Escrow arrangements cannot be operated from a normal current account, per practitioner view rejecting that practice. Whether funds may be received into a normal current account and later disbursed to sellers as an escrow arrangement is questioned; the responding practitioner states it is not possible, raising an unresolved issue about the correct accounting entries and the suitability of ordinary current accounts for holding third party funds pending payment.