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Articles by Nagasravan Tamma
Page 16 of 27
Compare return inward and return outward
The major differences between a return inward and a return outward are as follows −Return inwardReturn inward is defined as the seller returning the goods back due to various reasons (defective, incorrect goods etc.)Return inward transactions starts, when the seller receives sold goods back.It occurs next to return outwards.The journal entry for return inward is as follows −Return inwards A/c To customers AcDebit CreditIt is recorded in seller books of accounts.Impact − Reduces seller sales and creates liability.In financial statements, it is disclosed in reduction from sales in the seller trading account.The consequences are goods resale ...
Read MoreDifferentiate between purchase book and purchase account
The major differences between a purchase book and a purchase account are as follows −Purchase bookPurchase book is the book, which records all the credit transactions related to the goods purchased.Primary book of accounts.The purpose of a purchase book is to maintain all the credit transactions related to the goods purchased.Records only transactions related to credit business.Purchase book balance is not transferred to business financial statements.No separate credit column.Not dependent on other books.The format of purchase book is as follows −DateParticularsInvoice numberLedger folioDetailsAmountPurchase accountPurchase account is the ledger account that records all the credit and cash transactions related to business.Secondary ...
Read MoreHow are the transactions recorded in respective journals?
Refer the transactions given below and record them in appropriate format in the respective journals.On May 3 − Goods worth of Rs.5700/- purchased from Ram & co.On May 6 − Sold merchandise worth Rs. 7300/- to N&S.On May 14 − Purchase merchandise worth of Rs.2800/- from B&R.On May 15 − Sales (credit) of goods worth of Rs.1800/- to X& Co.On May 16 − N&S returned goods worth of Rs.800/-On May 19 − Return merchandise to Ram & Co worth of Rs.650/-On May 21 − Furniture purchased from Mr. S of Rs.4800/-On May 25 − Return goods worth of Rs.760/- to B&ROn May 28 ...
Read MoreHow to prepare to return an outward book?
Refer to the transactions given below and prepare a return outward book.On June 2 − Received note worth of Rs.800/- from V.On June 9 − Received note worth of Rs. 350/- from S.On June 15 − Received note worth of Rs. 600/- from M.On June 20 − Received note worth of Rs. 1200/- from N.SolutionThe return outward book for the above mentioned data is as follows −Return outward bookDateName of customerDebit noteFolioAmount02/06/2005V80009/06/2005S35015/06/2005M60020/06/2005N1200total2950For V account, the return outward book is as follows −DateParticularsAmountDateParticularsAmount02/06/2005Return outwards800For S account, the return outward book is as follows −DateParticularsAmountDateParticularsAmount09/06/2005Return outwards350For M account, the return outward book ...
Read MoreHow to prepare to return inwards book?
Let us consider two examples to learn how to prepare a return inwards book.Example 1Refer the transactions given below and prepare return inwards book.On December 4 − X return goods worth of Rs.1000/- on which trader allowed a discount of 5% (credit note # 233).On December 10 − Y allowed a reduction of Rs.1500/- (invoice issued earlier) (credit note #234)On December 12 − Z return goods worth of Rs.1175/- (credit note # 235).On December 20 − D was issued an invoice of Rs.2300/-, trader allowed a discount of 20%, after he pointed out a defect in goods for the same invoice (credit ...
Read MoreHow 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 ...
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