account notes

7/28/2019 Account Notes

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Director: Mr. Bharat Mehta

Your Account NotesDay -1

What is Account:

Recording Business Transaction in a Systematic Mannerso that we

can find out ourbusiness profit or loss and ourfinancial position.

Business:

To Carry on any activity on a regular basis to earn Profit.

Systematic Manner:

Presenting information in a meaningful order so that it is easy to read,

understand and analyzed.

Business Profit or Loss:

Profit earned from business activities not from outside sources.

Financial Position:

Capital Balance, Cash in hand, Dues, Loan Balance, Bank Balance,

Assets Position

What is Included in Activities:

Sale-Purchase, Receipt-Payment, Profit-Loss

Different Parties Involved in Business:

Owners- Proprietor or Partner or Share Holder

Debtors- To Whom Goods are soldCreditors- From Whom Goods are purchasedBanks- From Where we take Loan or Make Our Cheque

Transaction.

What an Accountant Do:

Maintain books of Accounts in a proper manner so that we can findour debtor or creditors, capital of the owner, cash in hand and profit orloss of the firm till date.

BHARAT Computers & Coaching

1-Ram Nagar, Tehsil Camp, Panipat, 0180-400095509896400955


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Scope of Account:

Book Writing, Balancing Ledgers, Find out Cash in hand, make acorrect Trial Balance, Prepare Trading and Profit & Loss Account toascertain the Profit or loss and at last finalizing the Balance Sheet.

Terms mostly used in Book Keeping:

Assets : Machinery, Building, Furniture, Cash, Bank BalanceLiabilities : Creditors, Capital, LoanSale : Sale of Material, Sale of Finished GoodsPurchase : Purchase of Material, Purchase of Finished GoodsExpenses : Rent, Salary, Wages, Telephone Exps, etc.Income : Commission, Rent Recd., Interest Recd.

Assets

Fixed Assets Current AssetsMachinery CashLand & Building Stock in handFurniture AdvancesCar, Scooter Debtors

Instruments Bank Balance

Fixed Assets are those assets, which are purchased to run thebusiness smoothly and remain fixed for a business. There is no saleor purchase of these items on a regular basis.

Current Assets are those assets that are by their nature can beconverted into cash with in a year or from those cash can begenerated in a short period.

Liabilities

Capital Term Liabilities Current LiabilitiesSecured Loans CreditorsUnsecured Loans Expenses Payable




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Day -2Capital :

Amount Deposit From Owner side.

Capital = All Assets External Liabilities

For Example suppose that the following balance appeared in thebooks of a firm:

Cash 20000/- Machinery 50000/- Stock 100000/-Debtors 40000/- Creditors 30000/-

Capital = All Assets External LiabilitiesAll Assets = Cash+ Machinery+ Stock+ Debtors

= 20000+ 50000+ 100000+ 40000

= 210000/-External Liabilities = Creditors

= 30000/-Capital = 210000- 30000

= 180000/-

Term Loan :

Loan can be Short Term or Long Term.

Short Term : For Less Than One year & this is called Current Liab.Long Term : For More Than One year

Loan Can be Secured or Unsecured.Secured Loans : Against Security of Property, etc.Unsecured Loans: Without Security

Current Liabilities:

Liabilities that are to be paid with in a year i.e. payment to be made toCreditors, Payment to be made to workers, Rent payable, etc.

Conclusion :From the above we can find out the conclusion that:

Capital = All Assets - External Liab.Or

All Assets = Capital + External Liab.

OrExternal Liab.= All Assets - Capital.




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Nature of Assets And Liabilities:

All the Assets have Debit BalancesAll the Liabilities have Credit Balance

All the Expense Should be Debited

All the Incomes Should be Credited

If Assets Increase : It Should be DebitedIf Assets Decrease : It Should be Credited

If Liabilities Increase : It Should be CreditedIf Liabilities Decrease : It Should be Debited

Example:

Furniture Purchased : Furniture A/c DebitConstruction of Building : Building A/c DebitCycle Sold : Cycle A/c CreditCar Sold : Car A/c CreditGoods Purchased : Purchase A/c DebitSale Made : Sale A/c - CreditRent Expenses : Rent A/c DebitSalary Expenses : Salary A/c Debit

Commission Recd. : Commission CreditInterest Recd. : Interest Recd. A/c CreditRent Due, but not Paid : Rent Payable CreditSalary Due, but not Paid : Salary Payable - Credit

Balance Sheet:

It is easier to understand the nature of assets and liabilities if weunderstand a Balance sheet Performa. A simple balance sheet is as:-

Balance Sheet

Liabilities Amount Assets Amount

Capital 180000 Cash 20000Creditors 30000 Machinery 50000

Stock 100000Debtors 40000

Total 210000 Total 210000




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Example

1. Gopal Started business with Rs. 75000 as CapitalAssets = Liabilities + Capital

Cash75000 = 0 + 75000

2. Gopal purchased furniture for Cash for Rs. 5000Assets = Liabilities + Capital

Cash + Furniture = 0 + 75000-5000 + 500070000 + 5000 = 0 + 75000

3. Goods purchased for Cash for Rs. 20000Assets = Liabilities + Capital

Cash + Furniture + Stock = 0 + 7500070000 + 5000 + 0-20000 + 0 + 20000 =50000 + 5000 + 20000 = 0 + 75000

4. Gopal purchased goods on credit for Rs. 16000Assets = Liabilities + Capital

Cash + Furniture + Stock = Creditor 50000 + 5000 + 20000 = 0 + 750000 + 0 + 16000 = +16000 + 050000 + 5000 + 36000 = 16000 + 75000

5. Goods costing of Rs. 12000 sold for Rs. 15000Assets = Liabilities + Capital

Cash + Furniture + Stock = Creditor

50000 + 5000 + 36000 = 16000 + 75000+15000 + -12000 = 0 + 300065000 + 5000 + 24000 = 16000 + 78000

6. Goods costing of Rs. 12000 sold on Credit to Ram for Rs. 15000Assets = Liabilities + Capital

Cash + Furniture + Stock + Debtors = Creditor 65000 + 5000 + 24000 = 16000 + 780000 + 0 + -12000 + 15000 = 0 + +300065000 + 5000 + 12000 + 15000 = 16000 + 81000

7. Paid for 1000 for Rent

Assets = Liabilities + CapitalCash + Furniture + Stock + Debtors = Creditor 65000 + 5000 + 12000 + 15000 = 16000 + 81000-1000 + 0 + 0 + 0 = 0 + -100064000 + 5000 + 12000 + 15000 = 16000 + 80000

Balance Sheet

Liabilities Amount Assets Amount

Capital 80000 Cash 64000Creditors 16000 Furniture 5000

Stock 12000

Debtors 15000





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For Home Work

1. Mukesh started business with Cash. 800002. Purchased goods for Cash. 280003. Purchased goods on Credit. 20000

4. Purchased furniture for Cash 60005. Rent Paid 20006. Commission Recd. 5007. Withdraw Cash for personal use 30008. Sold goods on credit (Cost Rs. 30000) 400009. Paid to Creditors 15000




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Q2.

1. Started business with cash Rs. 50000 and goods Rs. 20000.2. brought goods for cash Rs. 15000 and on credit Rs. 10000

3. goods costing Rs. 24000 sold at a profit of 25%. Half of thepayment received in cash.4. purchased furniture for office use Rs. 6000 and for

household use Rs. 4000.

Hint.1. Cash Increase 50000

Stock Increase 20000Capital Increase 70000

2. Cash Decrease 15000Stock Increase 25000Creditor (Liab.) Increase 10000

3. Stock Decrease 24000Capital (Profit) Increase 6000Cash Increase 15000Debtors Increase 15000

4. Furniture Increase 6000Cash Decrease 10000Capital Decrease 4000

Last Balances

Cash 40000Stock 21000Debtors 15000

Furniture 6000Creditors 10000Capital 72000





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Q3.If the capital of a business is Rs. 100000 and liabilities are Rs.60000. calculate total assets of the business.

Q4.

If total assets of a business are Rs. 200000 and capital is Rs.150000. calculate creditors.

Q5.A commenced business on 1st Jan. 1998 with a capital of Rs.100000. On 31st Dec. 1998 his assets were worth Rs. 160000and liabilities Rs. 15000. find out his capital on 31st Dec. 1998and profit earned by him.

Q6.

Calculate closing capital and total assets if:Capital on 1st Jan. 200000Income for the year 120000Expenses for the year 70000Drawings 5000Creditors at the end 60000

Q7. Fill in the Blanks

Capital Addition Drawings Profit Loss ClosingOpening in Capital Capital_______ _______ _______ _____ _____ ______

1. 50000 10000 8000 30000 0 ?

2. 60000 15000 12000 ? 0 80000

3. 80000 20000 ? 12000 0 87000

4. 70000 ? 20000 8000 0 73000

5. ? 10000 15000 0 6000 54000

Answer

1. 820002. 17000

3. 250004. 150005. 65000




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Types of Account:

There are three types of accounts.1. Personal Account2. Real Account

3. Nominal Account

Personal Account:

These includes all accounts of personal nature i.e. Ram Account,Sham Account, Harish Account, etc.

Rule1.

Debit the ReceiverCredit the Giver

Example:

1. Ram Gives Rs. 1000Rams Account Credit

2. Paid Rs. 1000 to HariRams Account Credit

3. Received Rs. 500 From MohanMohans Account Credit

Real Account:

This Includes the properties of the firm i.e. Cash, Furniture,Machinery, Building, etc.

Rule2.

Debit What Comes inCredit What Goes Out

Example:

1. Furniture Purchased for Rs. 1000 in cashFurniture Account Debit

2. Machinery Sold for Rs. 1000




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Machinery Account Credit

Nominal Account :

This includes all expenses and income accounts.

Rule3.

Debit All the Expenses and LossesCredit All the Incomes and Profits

Example

1. Rent Paid Rs. 1000Rent Account Debit

2. Salary Paid Rs. 1000Salary Debit

3. Commission Received Rs. 1000Commission Account Credit

4. Interest Received Rs. 1000Interest Account Credit

Home Work:

1. Received from Raju Account Debit/ Credit2. Paid to Rajan Account Debit/ Credit3. Paid to Salim Account Debit/ Credit4. Recd. From Sonu Account Debit/ Credit5. Machinery Purchased Account Debit/ Credit6. Machinery Sold Account Debit/ Credit7. Car Purchased Account Debit/ Credit

8. Car Sold Account Debit/ Credit9. Rent Paid Account Debit/ Credit10. Salary Paid Account Debit/ Credit11. Commission Recd Account Debit/ Credit12. Interest Recd. Account Debit/ Credit




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Use of All RulesThere can be use of a single rule in any transactionOr there may be use of any two rules in some transaction.It is called as Journal Entry

Example1. Cash Received From MohanCash Account Real Account DebitMohan Account Personal Account Credit

2. Cash Paid to GopalGopal Account Personal Account DebitCash Account Real Account Credit

3. Machinery Purchased

Machinery Account Real Account DebitCash Account Real Account Credit

4. Salary PaidSalary Account Nominal Account DebitCash Account Real Account Credit

Some More Examples

1. Ram Started Business with CashCash Account Real A/c DebitRams Capital A/c Personal A/c Credit

2. Purchased Goods for CashPurchase A/c or Goods A/c Real A/c DebitCash Account Real A/c Credit

3. Purchased Goods from Subhash on creditPurchase A/c Real A/c Debit

Subhash A/c Personal A/c Credit

4. Purchased Furniture for CashFurniture A/c Real A/c DebitCash A/c Real A/c Credit

5. Sold Goods for CashCash A/c Real A/c DebitSale A/c Nominal A/c Credit

6. Sold Goods to Mahesh




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Mahesh A/c Personal A/c DebitSale A/c Nominal A/c Credit

7. Paid Cash to SubhashSubhash A/c Personal A/c DebitCash A/c Real A/c Credit

8. Received Cash From MaheshCash A/c Real A/c DebitMahesh A/c Personal A/c Credit

9. Purchased goods from Ravi for CashPurchase A/c Real A/c DebitCash A/c Real A/c Credit

10. Purchased goods from RaviPurchase A/c Real A/c Debit

Ravi A/c Personal A/c Credit

11. Sold Goods to Suresh For CashCash A/c Real A/c DebitSale A/c Nominal A/c Credit

12. Sold Goods to SureshSuresh A/c Personal A/c DebitSale A/c Nominal A/c Credit

13. Purchase Machinery For CashMachinery A/c Real A/c DebitCash A/c Real A/c Credit

14. Withdraw Cash for Personal useRams Capital A/c (Debit) Personal A/c DebitCash A/c Real A/c Credit

15. Rent PaidRent A/c Nominal A/c Debit

Cash A/c Real A/c Credit

16. Wages PaidWages A/c Nominal A/c DebitCash A/c Real A/c Credit

17. Paid Salary to GopalSalary A/c Nominal A/c DebitCash A/c Real A/c Credit

18. Received CommissionCash A/c Real A/c Debit




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Commission A/c Nominal A/c Credit

List Price:

The Price that is written on the product.Note: No entry has been passed for the list price.

Trade Discount:

Discount allowed at the time of bargaining (Sale/ Purchase)Note: No entry has been passed for the trade discount.

Cost Price:

List Price Trade DiscountNote: Entry has been passed for this amount only.

Cash Discount (Ignore Personal A/c Rules)

Discount allowed at the time of payment.

Cash Discount Received Income CreditCash Discount Given Loss Debit

Q.1. Ram Started business with cash Rs. 80000, Goods Rs.

40000 Furniture Rs. 20000.2. Sold goods to nandal of the list price of Rs. 20000 after

giving him trade discount of Rs. 2000.3. Nandal returned the goods list price of Rs. 4000.4. Received from nandal in full settlement RS. 14150.5. Purchase goods from brij mohan of the list price of Rs.

10000 at 15% trade discount.

6. Returned goods to brij mohan of the list price of Rs. 1000.7. Settled the account of brij mohan by paying cash after

deducted cash discount of 4%.8. Purchased goods from anil Rs. 50009. Purchased goods from sunil Rs. 1000010. Paid cash to anil Rs. 1900 and discount received Rs. 100.11. Paid Rs. 9800 to sunil in full settlement.12. Brought table fan for Rs. 1200.13. Brought table fan for Rs. 1200 for rams house.

14. Sold goods for cash of the list price of rs. 8000 at 10% tradediscount and 3% cash discount.15. Paid rent Rs. 800.




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16. Paid office exps Rs. 700.17. Paid traveling exps Rs. 380.

Answer:

1. Cash A/c Debit 80000Purchase A/c Debit 40000Furniture A/c Debit 20000Rams Capital A/c Credit 140000

2. Nandal A/c Debit 18000Sale A/c Credit 18000

3. Sale Return A/c Debit 3600Nandal A/c Credit 3600

4. Cash A/c Debit 14150Discount Debit 250Nandal A/c Credit 14400

5. Purchase A/c Debit 8500Brij Mohan Credit 8500

6. Brij Mohan Debit 850Purchase Return Credit 850

7. Brij Mohan Debit 7650Cash A/c Credit 7344Discount Credit 306

8. Purchase A/c Debit 5000Anil A/c Credit 5000

9. Purchase A/c Debit 10000Sunil A/c Credit 10000

10. Anil Debit 2000Cash A/c Credit 1900Discount Credit 100

11. Sunil A/Sunil A/c Debit 10000Cash A/c Credit 9800Discount Credit 200

12. Table Fan Debit 1200Cash A/c Credit 1200

13. Capital A/c Debit 1200Cash A/c Credit 1200

14. Cash A/c Debit 6984Discount A/c Debit 216Sale A/c Credit 7200

15. Rent A/c Debit 800Cash A/c Credit 800

16. Office Exps Debit 700Cash A/c Credit 700

17. Traveling Exps Debit 380Cash A/c Credit 380




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Recording Of Banking Transaction:

1. When cash is deposited into the bank

Bank A/c DebitCash A/c Credit

2. When cash is withdrawn from bank

Cash A/c DebitBank A/c Credit

3. When Cheque recd. And deposited into bank.

Bank A/c DebitCustomers A/c Credit

4. When Cheque is Dishonored

Customers A/c DebitBank A/c Credit

5. When Cheque is given to any Party

Partys A/c DebitBank A/c Credit

6. Bank Given Interest

Bank A/c Debit

Interest A/c Credit

7. Bank Charge Interest

Interest DebitBank A/c Credit

8. Bank Charges taken by bank

Bank Charges A/c DebitBank A/c Credit

9. When cash is withdrawn for personal use.

Drawings A/c DebitBank A/c Credit

10. When Expenses is directly paid by cheque.

Expenses A/c DebitBank A/c Credit

Bad Debts:

If any customer become insolvent and it is not possible to recover the balance amountfrom him, we can say it bad debtor or Bad debt. It is a loss to the firm.




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Director: Mr. Bharat MehtaBad Debt A/c DebitCustomers A/c Credit

Q1.

1. Vishal Started business with cash Rs. 20000, Stock Rs. 40000,

Furniture Rs. 3600.

2. Cash Deposited into bank Rs. 5000.

3. Sale made to X for Rs. 6000.

4. Sale made to Y for Rs. 8000.

5. Sale made to Z for Rs. 10000.

6. Bank Loan Taken for Rs. 10000.

7. Cash Withdraw from Bank 10000.

8. Purchase from Ajay Rs. 5000.

9. Purchase from Vijay Rs. 7500.

10. Paid Expenses Rs. 5000.

Next Year:

1. Bought goods from kailash for Rs. 20000 at a trade discount of 10% and cash

discount of 2%. Paid 60% amount immediately.

2. Sold Goods to X for Rs. 9000/-

3. Received Rs. 14800 from X in full settlement of his account.

4. Cash deposited into bank Rs. 10000.

5. Cheque Recd. From Y for Rs. 7850 in full settlement of his account and

deposited into bank.

6. Received a cheque from Z Rs. 2000.

7. Cheque received from Y dishonoured.

8. Cash sale Rs. 15000; out of this amount Rs 12000 deposited into bank.

9. Amount due to Ajay paid by cheque.

10. Old newspapers sold Rs. 50.

11. Old furniture sold Rs. 750.

12. Purchase goods from Gopal and paid by cheque Rs. 8000.

13. Sold half of the above goods to Chanderkant at a profit of 30% on cost.

14. Proprietor withdraws for private use Rs. 2000 from office and Rs. 3000 from

bank.

15. Paid salary to Motilal by cheque Rs. 2000.

16. Paid rent by cheque Rs. 1500.17. Paid trade expenses Rs. 500.




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Answer:

1. Cash Debit 20000Purchase Debit 40000Furniture Debit 3600

Capital Credit 63600

2. Bank A/c Debit 5000Cash A/c Credit 5000

3. Xs A/c Debit 6000Sale A/c Credit 6000

4. Ys A/c Debit 8000Sale A/c Credit 8000

5. Zs A/c Debit 10000

Sale A/c Credit 10000

6. Bank A/c Debit 10000Bank Loan A/c Credit 10000

7. Cash A/c Debit 10000Bank A/c Credit 10000

8. Purchase A/c Debit 5000Ajays A/c Credit 5000

9. Purchase A/c Debit 7500

Vijays A/c Credit 7500

10. Expenses A/c Debit 5000Cash A/c Credit 5000

Next Year

1. Purchase A/c Debit 18000Cash A/c Credit 10584Discount A/c Credit 216Kailash A/c Credit 7200

2. Xs A/c Debit 9000Sale A/c Credit 9000

3. Cash A/c Debit 14800Discount A/c Debit 200Xs A/c Credit 15000


5. Bank A/c Debit 7850

Discount A/c Debit 150Ys A/c Credit 8000




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Director: Mr. Bharat Mehta6. Bank A/c Debit 2000

Zs A/c Credit 20007. Ys A/c Debit 8000

Bank A/c Credit 7850Discount A/c Credit 150

8. Cash A/c Debit 15000Sale A/c Credit 15000


10. Ajays A/c Debit 5000Bank A/c Credit 5000

11. Cash A/c Debit 50Miscc. Recpt. A/c Credit 50

12. Cash A/c Debit 750Furniture A/c Credit 750

13. Purchase A/c Debit 8000Gopals A/c Credit 8000

14. Gopals A/c Debit 8000Bank A/c Credit 8000

15. Chanderkants A/c Debit 5200Sale A/c Credit 5200

16. Drawings A/c Debit 5000Cash A/c Credit 2000

Bank A/c Credit 3000

17. Salary A/c Debit 2000Bank A/c Credit 2000

18. Rent A/c Debit 1500Bank A/c Credit 1500

19. Trade Expenses A/c Debit 500Cash A/c Credit 500

Outstanding ExpensesExpenses Incurred but not yet paid.

Entry:

Expenses A/c Nominal A/c DebitExps. Outstanding A/c Liability Credit

Salary to Mr. Ram not yet Paid

Salary Expenses A/c DebitSalary Outstanding A/c Credit

Rent Due but not yet paid




19/31

Director: Mr. Bharat MehtaRent Expenses A/c DebitRent Outstanding A/c CreditEntry for Cash Book:

1. Ram started business with cash Rs. 350000.

2. Cash deposit into Bank Rs. 150000.

3. Purchased goods for Rs. 15000 in cash.4. Purchased goods for Rs. 20000 in cash.

5. Purchased goods for Rs. 25000 in cash and paid 10% sale tax.

6. Purchased goods for Rs. 18000 in cash and paid 12% sale tax.

7. Purchased goods for Rs. 11000 in cash (Including 10% sale tax)

8. Capital Addition for Rs. 50000.

9. Purchased goods for Rs. 15000 from Ali.

10. Purchased goods for Rs. 20000 from Roshan.

11. Purchased goods from Suraj for Rs. 10000 (10% sale tax extra.)

12. Paid for Freight Rs. 100.

13. Purchased goods from Ahmed for Rs. 20000 ( 4% sale tax extra.)

14. Purchased goods from Radha for Rs. 22400 (including 12% sale tax)

15. Sale made for Rs. 20000 in cash.

16. Sale made for Rs. 15000 in cash.

17. Sale made for Rs. 12000 to Rohit.

18. Sale made for Rs. 22000 to Rajesh.

19. Sale made for Rs. 180000 in cash to raja and 10% sale tax taken extra.

20. Sale made for Rs. 2200 to raja (Including 10% sale tax)

21. Paid to Ali Rs. 14800 in cash in full settlement.

22. Paid to Roshan full amount by Cheque.

23. Paid to Suraj by cheque after deducting Rs. 200 as discount.

24. Paid to Ahmed Rs. 10000 in cash.

25. Paid to Radha Rs. 22000 in full settlement by cheque.

26. Cheque Recd from Rohit.

27. Cheque Recd from Rajesh for Rs. 21500 in full settlement.

28. Cash recd from Raja Rs. 2200.

29. Rent Paid Rs. 5000 by cheque.

30. Salary Paid by cash Rs. 12000.




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31. Telephone Bill paid by cheque for Rs. 1000.

32. Electricity bill paid for Rs. 800 in cash.

33. Commission Recd. Rs. 1500 in cash.

34. Job work expenses Rs. 8000 by cheque.

35. Manufacturing Exps paid in cash Rs. 5000.

36. Wages paid in cash Rs. 25400.

37. Cash withdraw from Bank Rs. 4000.

38. Furniture Purchased for Rs. 8000 from Roshan & Co.

39. Paid Cheque to Roshan & Co. for Rs. 7800 in full settlement.

40. Sold goods to nandlal of the list price of Rs. 20000 at a trade discount of 10%.

41. Nandal Returned goods of the list price of Rs. 4000.

42. Recd. From nandlal Rs. 14150 by cheque in full settlement.

43. Purchased furniture in cash for Rs. 2000 for personal use.

44. Purchased furniture by cheque for Rs. 5400 for office use from Sagar & Sons.

45. Paid for Insurance exps for Stock Rs. 1550.

46. Machinery Purchased for RS. 50000 and paid Rs. 2000 for freight.

47. Income tax Paid Rs. 5000 by cheque.48. Sale tax deposit in cash to Government A/c

49. Bank Charges Rs. 50 and Bank interest Recd. Rs. 100.

50. Withdraw for Personal use Rs. 15000 in cash.




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51. Paid Rent of Rs.500.

52. Paid for Entertainment Exp Rs.200.

53. Paid for Printing Rs. 150.

54. Paid for Advertisement Exps Rs.300.

55. Purchased goods for Rs.4000 and sale tax Extra Rs.400.

56. Sale Goods to Raja for Rs.25000 and sale tax 10% extra.

57. Purchased from Ali goods worth Rs.25000 and sale tax 12% extra.

58. Purchased goods from Roshan Rs. 15000.

59. Capital addition Rs.15000.

60. Traveling Exps. Paid by Cheque Rs.500.

61. Paid Freight Rs.400.

62. Cash deposit Rs.15000.

63. Cash Received from Lata Rs.18000.

64. Cheque Received from Bhawna Rs.15000.

65. Sale to Rohit Rs. 15000 and 10%sale tax extra.

66. Sale made to Raja for 30000 and 10% sale tax extra.67. Purchase made from Roshan for Rs.20000 and 10%sale tax extra.

68. Purchased from Ahmed Rs. 20000 and 5% sale tax extra.

69. Purchased from Ahmed Rs. 25000 and 10%sale tax extra.

70. Purchased from Radha Rs. 15000 and 12% sale tax extra.

71. Sale made to Raja for Rs. 50000 and 5% sale tax extra.




75. Paid for Printing Rs.20.

76. Paid for advertisement Exps Rs.400.

77. Paid for Freight Rs.150.

78. Cash deposit into bank Rs.10000.

79. Cheque Recd. From Raja for Rs.10000.

80. Cheque Paid to Roshan for Rs.15000.




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81. Freight Cash Paid Rs. 1000.

82. Paid Rent of Rs. 500.

83. Paid for Entertainment Exps. Rs. 250.


85. Paid for Advertisement Exps. Rs. 500.


87. Cash deposit into bank Rs. 1000.

88. Cheque Recd. From Raja for Rs. 1500.

89. Cheque Paid to Roshan for Rs. 500.


91. Cash withdraw from bank Rs. 5000.


93. Paid for Entertainment Exp. Rs. 240


95. Paid for Advertisement Exps. Rs. 4000.96. Paid for Freight Rs. 450.








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101. Paid Salary of Rs.500.



104. Paid for Advertisement Exps Rs.500.

105. Purchased goods for Rs.8000 and sale tax Extra Rs.400.

106. Sale Goods to Raja for Rs.5000 and sale tax 10% extra.

107. Purchased from Ali goods worth Rs. 1000 and sale tax 12% extra.

108. Purchased goods from Roshan Rs. 1500.

109. Capital addition Rs.25000.

110. Traveling Exps. Paid by Cheque Rs.1500.

111. Paid Cartage Rs.200.jjn

112. Cash deposit Rs.5000.

113. Cash Received from Lata Rs.15000.

114. Cheque Received from Bhawna Rs.25000.

115. Sale to Rohit Rs. 50000 and 10%sale tax extra.

116. Sale made to Raja for 20000 and 10% sale tax extra.117. Purchase made from Roshan for Rs.10000 and 10%sale tax extra.

118. Purchased from Ahmed Rs. 10000 and 5% sale tax extra.

119. Purchased from Ahmed Rs. 5000 and 10%sale tax extra.

120. Purchased from Radha Rs. 15000 and 12% sale tax extra.





125. Paid for Printing Rs.280.

126. Paid for advertisement Exps Rs.4000.

127. Paid for Cartage Rs.150.

128. Cash deposit into bank Rs.10000.

129. Cheque Recd. From Raja for Rs.1000.

130. Cheque Paid to Roshan for Rs.1500.




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133. Paid for Entertainment Exps. Rs. 550.








141. Cash withdraw from bank Rs. 5000.


143. Paid for Entertainment Exp. Rs. 740



146. Paid for Cartage Rs. 50.147. Cash deposit into bank Rs. 10000.



150. Cartage Cash Paid Rs. 100.




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Accountant does:-

First : making all entries in the case book

Second: Posting all entries in the Ledger

Third : Balancing all Ledgers

Fourth : Find out Cash in hand

Fifth : Tallied all Accounts

Sixth : Bank Reconciliation

Seventh making summary of all the account i.e. Trial Balance

Eighth : Making Trading Account

Ninth : Ascertain Profit of the Firm by making Profit & Loss A/c

Tenth : Making Balance Sheet of the Firm.

Trial Balance:

Making summary of all ledger A/cs

Performa:-

Sr.No. Particulars L.F.No. Debit Credit

01 Capital 01 100000.00

02 Machinery 02 15000.00

03 Land & Building 03 10000.00

04 Alis Account 04 15000.00

05 Ahmed Account 05 2500000

05 Cash in hand 50000.00

06 Bank Balance 10 15000.00

----------- ------------

Total: 115000.00 115000.00

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Sale Tax under Haryana General Sale Tax ActOr

VAT under Value added Tax Act, 2003

There may be different types of sale in a unit like Sale tax-free, Sale Tax-paid, Sale

Taxable4%, Sale Taxable 8%, etc.

We can classify all of them in thee broad categories: -

1. Taxable Sale

2. Taxfree Sale

3. Exempted Sale

Further sale can be made with in state or out of state.

With in Haryana simply called as Local Sale

Out of Haryana simply called as C.S.T. Sale

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In this way Purchase can be Classified in three more ways:-

1. Taxable Purchase

2. Taxfree Purchase

3. Exempted Purchase

Further Purchase can also be made with in state or out of state.

With in Haryana simply called as Local Purchase

Out of Haryana simply called as C.S.T. Purchase




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Registration of Dealer:

Every businessman who wants to deal in taxable items and his expected sale for a year

will exceed Rs. 500000.00, he is required to registered under VAT Act, 2003.

Further if a businessman deals in taxable item and he wants to made any sale out of

Haryana, he is liable for registration under VAT, nevertheless his sale doesnt exceed

Rs. 500000.00.

Documents Required for Registration in case of Proprietorship Unit:

1. Application Form

2. Court Fees Stamp for Registration Fees

3. One Photo of Prop.

4. 2 Sureties (Gurantor-Who had already registered under VAT)

5. One photo of each sureties.

6. Sureties Bond

7. Statement of Fact.

8. Address proof of Prop i.e. Ration Card

9. Identity proof of Prop. i.e Voter Card

10. Map of the Site11. Rent Deed if Rented Property.

12. Registry copy if Owned Property.

13. Affidavit.

14. Power of Attorney.

15. PAN of the Proprietor.

16. First Import bill.

17. Stamps of the Firm

18. Books of Accounts.

Documents Required for Registration in case of Proprietorship Unit:

1. Application Form

2. Court Fees Stamp for Registration Fees

3. One Photo of each Partner.

4. 2 Sureties (Gurantor-Who had already registered under VAT)

5. One photo of each sureties.

6. Sureties Bond




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Director: Mr. Bharat Mehta7. Statement of Fact.

8. Address proof of each Partners i.e. Ration Card

9. Identity proof of each Partners. i.e Voter Card

10. Map of the Site

11. Rent Deed if Rented Property.

12. Registry copy if Owned Property.

13. Affidavit.

14. Power of Attorney.

15. PAN of the Partners.

16. PAN of the Firm

17. First Import bill.

18. Stamps of the Firm

19. Books of Accounts.

20. Partnership Deed

Sale Tax Return

This return is submitted mandatory by every Register dealer with in a period of 30 days

from the end of the each quarter. In this return every register dealer has to give details ofsale and purchase (bill-wise and date wise), his total tax details i.e. whether tax is

payable or refundable. If it is payable it should be paid before filing of sale tax return.

With this return one has to attach some annexure (the details of which is given in next

page) and proof of tax deposit. Three are 4 returns in nos is to be submitted by every

register dealer in a complete year.

Financial year

Our financial year starts from 1st day of April to 31st March every year.

Quarter

As the financial year contains 12 months, there are four quarters.

From 1st April to 30th June I Quarter

From 1st July to 30th Sept. II Quarter

From 1st Oct. to 31st Dec. III Quarter




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Director: Mr. Bharat MehtaFrom 1st Jan. to 31st March IV Quarter

Annexure Under VAT (Local Sale & Purchase):For Sale:

There are different types of list of sale that is to be made out by registered dealer

according to their sale picture:-

Sr.No. Description List

01 Sale outside the State (Of goods purchased outside the state) LS-1

02 Sale in the course of inter-State trade LS-203 Sale in the course of import into India LS-3

04 Sale in the course of export out of India LS-4

05 Sale of exempted goods in the State

06 Sale of goods UNICEF,UNTAB,WHO,other prescribed UN bodies foreign missionLS-5

07 Value of goods sent for sale to local agents(VAT dealers) LS-6

08 Value of goods exported out of State(Consignment transfers) LS-7

09 Value of goods disposed of otherwise than by sale LS-8

10 Value of taxable goods LS-9

For Purchase:

There are different types of list of Purchase that is to be made out by registered dealer

according to their Purchase picture:-

Sr.No. Description List

01 Purchased outside the State(for sale outside) LP-1

02 Purchased in the course of export out of India LP-2

03 Purchased in the course of inter State trade LP-3

04 Purchased in the course of import into India LP-4

05 imported into State LP-5

06 Received for sale from dealers regd.under VAT LP-6

07 (1) Purchased from VAT dealers on tax invoice LP-7

(2) Other purchase in the State

Central Sale Tax (CST)




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Director: Mr. Bharat MehtaThis is the tax, which is levied for sale made out of Haryana i.e from one state to other

state. If one register dealer purchase from another register dealer goods out of state he

is liable to pay tax at the rates mentioned in the Act, but if the register dealer making the

purchase produce C form to the selling register dealer then he is only liable to pay

concessional sale tax normally 4%. Return for the same is to be given on Form-I.

Sale Tax Adjustment:

Sale Tax Payable if

[Sale Tax on Local Sale + Sale Tax on Central Sale] > Sale tax paid on Local Purchases

Sale Tax Refundable if

[Sale Tax on Local Sale + Sale Tax on Central Sale] < Sale tax paid on Local Purchases

Sale tax is to be deposited through Challan, Demand Draft or Pay Order in the name of

Assessing Authority . Further one has to attach a Challan Form also for the same.

Note:

1. There is no adjustment regarding tax paid on purchases made out of state till 31st

March, 2005.

2. If one is not interest to take the refund immediately, he can carried forward the

refund amount in the next quarter and adjust the same against the tax payable forany succeeding quarter/ quarters.

3. There is no refund regarding the tax paid on fixed assets.

We can only make the adjustment regarding the sale tax paid on some

specific assets which is require for the manufacturing of goods like

machinery, Gen. Set.

4. There is penalty for not filing the sale tax return within time.

5. There is a penalty as well as Interest for not depositing the tax payable with in

due time.




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Trial Balance