ACCOUNTINGDOSE

Journal entry for foreign exchange fluctuation (Imports) As per Accounting standard 11 : The effects of changes in foreign exchange rates issued by ICAI A foreign currency transaction should be recorded ,by applying the foreign currency amount the exchange rate as on date of purchase. Foreign exchange fluctuation is difference between the rate of currency at the time of purchase and the rate at the time of payment. The rate of currency in the market will varies daily it causes loss or gain to entity.    Computation of foreign exchange loss or Gain Currency Rate as on purchase less Currency rate as on payment = If difference is negative then it is treated as loss, If difference is positive it is treated as Gain. Journal Entry for foreign exchange (Purchase & Payment made within financial year) A ltd purchased material of $15000 on 01 st February 2015 from BUK CO. The Due date is on 15 th march 2015.  $ is quoted at market as on 01/02/2...

Journal Entry for custom duty on purchase import Custom duty is applicable on purchase imports, the importer is liable to pay duties on import of material. Duties include Custom duty, Excise duty, Additional Excise duty & cess (Education cess, Secondary higher education cess) on both custom duty & excise duty. The duty details are available in Bill of Entry document issued by Custom authorities at import location. The entry will be as follows: -Import of 100000/- worth material.                                Custom Duty A/C                         Dr      7500                     ...

Hi friends, here we are going to learn how to do balance sheet and statement of profit and loss in less than ten minutes. Let us begin the topic with trail balance. Trail Balance is a statement of debit and credit balances of various ledger accounts at the end of the financial year or any given date.As it is prepared by taking all ledger account balances , both debit and credit sides of the trail balance are always equal.T rail balance is used to prepare final accounts of entity.

Journal Entry for Fixed Deposit Fixed deposit Rs. 100000/- was deposited in SB BANK                    Fixed Deposit A/C             Dr      100000                              To SB BankA/C                                         100000   (Being fixed deposit was done in SB) Rules for passing Journal entry Debit Fixed deposits are treated as non-current asset or current asset is depended on maturity period, if maturity period is less than one year...

Journal entry for manpower expense with service tax reverses charge As per service tax rules under reverse mechanism if service receiver is either private Ltd /Public Ltd and service provider is Sole proprietor /Partnership firm. Then service receiver has to pay service tax instead of service provider. This is applicable for both Man power services and work contract. Particular                       Service provider share                                          service receiver share                                          Manpower service                     ...

Journal entry for expense with service tax reverses charge Basically the service tax is collected and paid by the service provider, but there are some services for which the service receiver has to pay service tax, this system is called service tax reverse mechanism. This is applicable to companies and other type of entities irrespective of exemption limit (i.e. Rs.10 lakh).The service tax paid is eligible as CENVAT credit only services related to productive as per clarifications from the CBEC(Circular No.943/04/2011-CX,dated 29-04-2011) with regards to input and input services. Here I am giving the list of service for which service receiver has to pay Carriage Inward and outward Manpower services received by public or private ltd from firm or sole proprietors   Work Contract service   Legal Service   Insurance agent service   Sponsorship service   Rent a cab service

Journal entry for Service related Expense (excluding TDS) Expense of the organisation include both direct and indirect .They may be related to services received by company in so many ways like Professional services, Rent, Contract services etc. The service receiver is liable to deduct on services at the time of booking or payment as per Expense tax act. Let us see some illustration Journal entry for Rent expense Rent paid to Parkas co. Rs.12000/-                    Rent A/C      Dr                          12000                          To Parkas Co. A/C                          ...

Journal entry for Service income (excluding TDS*) Service income may be auxiliary income of the organisation in case of manufacture companies and direct income in case of service companies. The services are like contract, rental income, professional income and letting out assets are tax deductible services as per Income tax act. *TDS=TAX DEDUCTED AT SOURCE.  Let us see some illustration Journal entry for service income Job work service to X .Ltd for Rs.10000/-                              X.Ltd A/C     Dr                10000                                   ...

Usually in some cases the debtor and creditor will be same party .At the time of settlement the balance payable or receivable will be adjusted against balance receivable or payable. So,for better understanding I am giving illustration below. Company name: Tat chemicals CO. Transactions are: Sale of Rs.100000/-                           Purchase of Rs.125000/- Here for sale to Tat chemicals separate account will be maintained by name Tata chemicals (Sale)                        Here for Purchase from Tat chemicals separate account will be maintained by name Tat chemicals (Purchase) Journal Entry for Sale            Tat chemicals (Sale) A/c Dr  100000/-                  ...

Journal entry for Sale of Asset for profit                                   Bank A/C      Dr                         6500 To old Machinery A/C (WDV)                  4500                          To Profit on sale of Machinery A/C          1500*                          To Excise duty payable A/C                     500

Journal entry for purchase of Asset (Exchange) for loss                Machinery   A/C                            Dr     8600 Excise Duty received (50%) A/C     Dr       700 Excise duty receivable (50%) A/C  Dr        700                 Loss on Exchange of machinery A/c Dr     500                                 To Sundry Creditor A/C                         9500                                 To old Machinery A/C               ...

Journal entry for purchase of Asset (Not ready to use) Purchase of machinery of Rs.10000/- including excise duty of Rs.1400/-                  Machinery (WIP) A/C                        Dr          8600 Excise Duty received (50%) A/C     Dr          700 Excise duty receivable (50%) A/C   Dr          700                                        To Sundry Creditor A/C               10000

Hi friends, here  we are going to learn journal entry for Purchase return. Usually in accounting software we need to pass journal entry but before these we have to understand types of Purchase return  1) Partly quantity returned  2)whole quantity returned

Hi friends, here we are going to learn journal entry for Purchase. Usually accounting software there is no need to pass journal entry like below                         SL.NO PARTICULAR DEBIT CREDIT 1 Purchase or Material    A/c       Dr          To Sundry Creditor   A/c XXXXX XXXXX Because in software there is separate entry field for Purchase, the required details will be updated in Purchase and Sundry Creditor ledgers. Purchase are divided into cash Purchase and credit Purchase and further sub categorized into manufacturing Purchase and trading Purchase. But i am giving brief explanation for the first entry here:-

Journal entry for sale return:- Hi friends, here we are going to learn journal entry for sale return. Usually in accounting software we need to pass journal entry but before these we have to understand types of sales return  1) Partly quantity returned  2)whole quantity returned

Hi friends here we are going to learn journal entry for sale. Usually in accounting software there is no need to pass journal entry like below:- SL.NO PARTICULAR DEBIT CREDIT 1 Sundry debtor A/c      Dr          To Sales  A/c XXXX XXXX (* Dr=Debit) Because in software there is separate entry field for sale, the required details will be updated in sales and Sundry debtor ledger accounts. Sales are divided into cash sales and credit sales and further sub categorized into manufacturing sales and trading sales. But i am giving brief explanation for the first entry here:-                                                                      ...

Hi , this is continuation of part- 1 of passing journal entries by understanding three golden accounting principles Click here for part- 1 Entry 1: Salary payable Rs. 15000/- is paid SL.NO PARTICULAR DEBIT CREDIT 1 Salary payable A/c      Dr             To cash  A/c 15000 15000                    (Being salary for the previous month is payable is paid) Rule for passing entry On business side: - The salary payable is settled by paying and cash is going out of business. Debit Salary payable is representative person. The personal account rule is applicable:- Debit the receiver account, here salary payable is treated as representative person because it represents salary of many persons. So, it is debited. Credit Cash is treated as asset. The real account rule is ...

Here we are going to learn how to pass journal entries by understanding three golden principles. Let us begin with introduction of business. Business is treated as separate entity so, while passing the journal entry you should treat it as artificial person. some simple techniques are sufficient to pass entry. Here you have to assume you as business that’s it. Entry 1:- Cash Bought into business of Rs.100000/- by raj SL.NO PARTICULAR DEBIT CREDIT 1 Cash A/c      Dr          To Raj capital  A/c 100000 100000 (Being Capital introduced into business) Rule for passing entry On business side:- It is receiving cash and liable to pay back to the person who invested. Debit Cash is treated as asset. The real account rule is applicable:-Debit what comes into business, here cash is coming into business.So, it is debit...

THREE  GOLDEN ACCOUNTING PRINCIPLES We have seen that an account may be related to a person or thing(Tangible or Intangible). While doing business transactions, one may come across numerous accounts that are affected. One has to decide about the accounting treatment for each of the account. The accounts are classified depending on their characteristics.

Accounting is art of recording, Classifying and summarizing of transaction in money or money's worth. STEPS IN ACCOUNTING :-