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Page 143 of 160
How to prepare a sales day book?
The transactions made by a FVY & co are as follows −On 3rd March − Goods sold to Ramkhi for 850/-On 12th march − 15 units sold to Yusuf for 50/- per unit.On 16th march − 40 units are sold to Vinod for 1600/- (includes 8% cash discount)On 20th march − Irfan bought goods worth 750/- on credit.SolutionFVY & co sold goods toOn march 3rd 2008 − Goods sold to ramkhi worth of Rs.850/-On march 12th 2008 − Goods sold to yusuf worth of Rs.750/-Worth = 15*70 = Rs.750/-On march 20th 2008 − Goods sold to Irfan worth of Rs.750/-The sales ...
Read MoreExplain the sales day book and give its format
It is a manual ledger document, which contains information of sales made by a person on a business day. It is also called a sales register.Management analyses the effective amount after reconciliation every month. Sales day book is a subsidiary book, which maintains the overall sales and updates the sales every month end.It records all non-cash transactions related to sales. If a company sells any asset or investment on credit, these transactions are not recorded in the sales book, but those are recorded in a proper journal.Sales day book is also called a sales book/ sales journal/ sold book etc. ...
Read MoreHow to prepare a purchase day book?
A company purchases for the month of April 2012 as follows, On 6th April − Bought 25 computers from Com co. Each computer cost Rs.25000/- with 8% trade discount.On 12th April − Bought 150 phones from PHO co. Each phone cost Rs.950/- on credit.On 17th April − Bought 400 televisions from TV co. Each television cost 23580/- at a 4% cash discount.On 20th April − Purchased 150 radios from Ra co. Each cost them 320/- on credit.SolutionThe purchase day book is prepared for the above mentioned data.Amount due for Com co.Step 1 − On April 6th 25 computers were purchased ...
Read MoreWhat is the purchase day book and give its format?
Accounts are divided into two types namely primary accounts and secondary accounts. In books of primary entry, there are special books called subsidiary books.Purchase day book is a type of subsidiary book. Its main purpose is to record all business credit purchases (meant for resale). This book does not record purchase transactions (by cash) and purchases which are not meant for resale purchases.Cash purchase transactions are recorded in the cash book. Balance is debited to purchase account and supplier of goods is credited to individual amounts. This book shows the total amount of credit purchases for a period.Purchase book is ...
Read MoreWhat is an audit report form?
It is the form filled by taxpayers by the month of September of the assessment year. This audit report form consists of two variants, form 3CA and form 3CB. Form 3CA is the compulsory form filed by business persons or business professionals. Form 3CB filled by persons, who come under the section 44AD and 44AE.Audit requirementsAudit is compulsory for a business individual, if total sales/turnover/gross receipts exceeds more than Rs. 1 crore.Audit is compulsory for a professional individual, if gross receipts exceed more than Rs.50 lakhs.Under section 44AE (presumptive income scheme), audit is compulsory when business income is less than ...
Read MoreExplain books of accounts
Books of accounts are the records, which maintain the day to day business operations of all the business establishments and taxpayers, to know results of their operations.Books of accounts should be registered annually. For certificates like certificate of registration (COR) with the Bureau of Internal Revenue (BIR), these books of accounts are required. They are maintained for six years from the end of the relevant assessment year. These are maintained at the head offices or at each of the offices.Maintaining books of accountsProfessionals like legal, medical, engineering, architectural, accountancy, technical consultancy, interior decorations and who are notified by the Central ...
Read MoreHow are entries rectified after preparing the final balance?
There are two types of error rectifications while preparing the final balance. These are single side error and double side error respectively.Single side errorNominal accounts are preplaced by P&L (Profit & Loss) adjustment accounts.Example − Discount allowed of Rs.750 is not posted to a discount account.After trial balance, the error rectification is as follows −ParticularsDebitCreditDiscount allowed A/c To suspense A/c750750After final account, the error rectification is as follows −ParticularsDebitCreditP&L adjustment A/c To suspense A/c750750Double side errorWrong entries are identified and rectification is made by making the appropriate entries.Nominal accounts are replaced by P&L adjustment accounts.Suspense accounts, real and personal ...
Read MoreHow are entries rectified after preparing trial balance?
There are two types of error rectifications while preparing trial balance. These are single side error and double side error respectively, if the error is detected after preparing trial balance.Single side errorErrors in particular accounts are rectified by applying a suspense account.Suspense account − To prepare final accounts, the difference in trial balance is posted in the suspense account. If an error is rectified in trial balance, then the suspense account is closed. In the balance sheet, the suspense account appears in the asset side, if it appears in the debit side of the balance sheet and vice versa.Example − ...
Read MoreHow are entries rectified before preparing trial balance?
Rectification of errors can be classified into two types, namely single side error and double side error, if the error is identified before preparing trial balance.Single side errorEntry is rectified by an appropriate posting in an affected account.Example − Entry in purchase account over casted by Rs. 15, 000/-Correction −Dr.Cr Purchase accountParticularsAmount (in rupees)ParticularsAmount (in rupees)ToBy error− wrong posting15000Double side errorWhile correcting the error, following principles are followed −Identify the correct entry.The entry is recorded.Rectification of entry.Example − Company purchased a building worth of Rs.5, 00, 000/- and while recording, they wrongly passed in the purchased account.The rectification is as ...
Read MoreHow is the balance sheet prepared from trial balance?
Let us understand the concepts of balance sheet and trial balance, before learning how to prepare a balance sheet from the trial balance.Balance sheetBalance sheet is one of the important fundamental financial statements for both accounting and financial modeling. This sheet consists of the company’s assets, liabilities and equity.Balance sheet consists of two sides. One side consists of company assets and the other side consists of both liabilities and equity.Trial balanceIn simple words, trial balance is the summary of all business activities and indicates business financial health. Investors decide whether to invest or not based on the company’s trial balance.For ...
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