Alter and Delete Voucher entries by Click in Tally.ERP 9

If you want to alter or delete in Tally.ERP 9 , then this new facility available for speeding of your accounting work . Earlier this facility was not available in Tally 9 . I often got many queries from fresh accountants who just wanted to know how to delete voucher entries because some time if you forget pressing short cut command for delete Ctrl + d in day book mode , then now you can also delete by just mouse click on below button and you will also see alter button bellow day book mode in Tally.ERP 9 with this you can change any thing in voucher entries , if you have done any mistake . Enjoy new facility in Tally.ERP 9

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Solution of the problem relating to sale's journal Entry

Problem :

I am working trading company as a accountant . Other company received stock from us RS.20000/-Sold in exhibition sales then amt credited our account not money given to us, then company issued credit note for us in that heading stock transfer Rs.20000/-

So above credit note i have passed like this correct or not , please give suggestion , and i am waiting for your reply please.
1.
Company a/c Dr 20000/-
to purchase a/c 20000/-
(being stock given to sritech then sold in exhibition
vide their crdit note no. xxxxxx).

OR

2.Company a/c Dr 20000
To sales 20000

(being stock given to the company then sold in exhibition then amt debited our account)

here i want to show in my books sales or stock transfer to the company please reply

Solution


Because you have given the goods of Rs. 20000 to other company but you have not mentioned that the other company is your company agent or company is your customer .

Suppose if other company is your customer , then if you have given him goods , it is sale and if you have not received money at the time of goods given , then the following entry will passed

Company Account ( debtor Account ) Debit 20000

Sale Account Credit 20000

Because other company has not return goods so , without return of goods other company can not issue credit note so , you must demand money for your sold goods .

When you will receive money , you will pass following journal entry


Bank / Cash Account Debit 20000

Company ( debtor name ) account credit 20000

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What is Participatory notes or PN or P-Notes) ?

Any investor who wants to invest his money must register with SEBI . But if any investor who invests his money with the instruments without registering with SEBI .
That instrument is called participatory notes or we can simply say PN or P- Notes in Finance . Security exchange board of India has given this facility only to foreign institutional investors (FIIs) to invest in Indian companies with participatory notes . Trading in Shares with participatory notes is so easy for foreign investors because they can easy hide their identity by using P-Notes . It is like contract or agreement notes which can easily transferred or delivered or endorsed under any agreement of sale of shares . So , it is not possible who has invested money in Indian capital market .





Invested money may be black money or money earned from drugs under P-Notes system . So , this is the top debated issue whether it should be banned from Indian capital market or not . SEBI is view on this issue is not very transparent or clear but hope , in future PN instrument will be banned from Indian capital market .


How to invest money with participatory notes


First of all foreign investors deposit the amount of investment in US or foreign institutional investors account and after this FIIs buys shares on their proprietary account . Thus foreign investors becomes the owner of shares without any identity disclosing .

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Role of SBI in International Finance and business

State bank of India , who is the largest bank of India is growing fastly in international finance and service business sector. The following report can explain
the role of SBI in International Finance and Business .

• SBI has 92 foreign office spread over 32 countries for providing financial and banking business services .
• SBI is doing business of banking with Italy's bank popolare di vicenza under co-operation venture contract .
• SBI wants to increase his share in international business and finance up to 25% of his total business in 2012.
• SBI purchased 76% shares of Indonesia's PT Bank Indomonex in 2005 and according to the Economics Times , SBI is making planning to acquire second top bank of Indonesia named EKsekutiff bank . SBI has already 10 branches in Indonesia . Merge of this Indonesia bank will enhance the importance of SBI in International finance and business

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Solution of problem of Membership fees Journal entry in Society accounts

Problem :

we have newly started total 26 family members as society type group collection. Membership received of Rs.500/- & Monthly received of Rs.100/-

I have entry pass in tally in receipt site -

( A ) Membership Collection (all received cash)

1) cash a/c Dr - 500 (Under Cash In Hand)

to A' A/c - 500 (Under head----------------------?)
(Being cash received from A A/c as Membership Fees)

2) cash deposit in Bank

under contra :
Bank Account Dr. 500
to Cash A/c 500 (here Mention Person or not i m confuse, suppose mention person then entry should be pass in receipt site & Second things not mention person name then entry pass in contra site, please sir suggestion me?)

( B ) Monthly Collection ( All received in cash)

1} cash a/c dr 100

to A a/C 100



2)Bank A/c Dr. 100
to Cash / Person Name A/c -100(under head ? & entry pass easy type a/c record? please send me solution sir)

Solution : (A )

Dear there is no need to mention name of party if it is year basis then in society accounting , we create membership fees account under the head of indirect income . If it is life time fees then , it will keep under current liability as membership fees fund . The following entry will pass , you can also direct enter in bank account also

Bank Account Debit 500

Membership fees account Credit 500

( B) same membership account will create under indirect income account only and pass following entry . Bank Account debit 100 membership fees account 100 Reason for not showing A's account in voucher entry

" Main reason is that membership fees is the earning of society and it does not effect on party personally . Because receiving of cash is on the basis of donation receipt so , party name is mentioned in receipt only not in accounts . Membership account is nominal account nature and most suitable here . "

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Comparison of Tally.ERP 9 and Tally 9

After using and buying Tally.ERP from Tally solution companies , they are facing some problem in it . So , I am starting new tutorials relating to Tally.ERP 9 . These tutorials are relating to Tally.ERP 9 . I have already written large number of tutorials relating to tally 9 for helping Accountants for solving their problems. Sometime ago , I have written Comparison of Tally 9 and Tally 7.2 and in same direction in this tutorial , you will read comparison of Tally.ERP 9 and Tally 9 .

1. When you first time operate Tally.ERP 9 and go to its Gate way . You will see above right side corner restore down facility . With this you can adjust Tally.ERP 9 according to your need . This facility is not available in Tally 9 . You can also see task bar and do other accounting work or writing any data from Tally.ERP 9 is more easy in Tally.ERP 9 software .


2. Tally.ERP 9 is providing you the Control center facility which is not available in Tally 9 . It means now you can login as remote tally.NET user from any place by writing your E-mail ID and your Tally.NET password . This facility is just like email facility , after providing email address and password , you can see the emails and same thing is here . After writing email id and Tally.NET password , you can see your company's accounting data from any place.


3. Tally.ERP 9 and Tally 9 have same facility of changing of language but Tally.ERP 9 software has new facility of changing keyboard language . It is different from language facility . In the gateway of tally.ERP 9 , above you will see keyboard button . With this you can change your keyboard language . If you keyboard is other than English . It will be helpful to operate Tally.ERP 9 in your mother tongue .


4. In Tally.ERP 9 , you can not maintain your payroll record separately like tally 9 because , Tally solution company has not provided payroll info and payroll voucher button in Tally.ERP 9 . It means now , you will follow simple procedure for recording of salaries and wages same as you were using in tally 7.2 or old version of tally . All salary related transactions will be recorded in Accounting vouchers and it will surely remove all doubts relating to payroll which were created when you were using tally 9 but also downside is that who is using payroll in tally 9 will more difficult to convert it in Tally.ERP 9 .


5. Now , you do not need to activate calculator in Tally.ERP 9 by pressing shortcut command Ctrl +N . Now , you can use calculator any time and any place in Tally.ERP 9 by just click right side bellow box of calculator . You can also minimize this calculate task bar just click on cross sign . After opening it , you have to just click on Ctrl + N .

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How much do you earn from music ?

Guess how much do you earn from music , if you are expert in the field of music? Music now become top earning sector and it was started when Michael Jackson earned 3 Crores pound from music in 1980 . Now U2, Dr. Dre and the Beatles top artist who is earning $61.9 million from recording and publishing music . Your can see top 50 artist's earning from music at Rolling Stone site .

Main source of earning in music field is by performing in stage , selling of albums , transferring the authority to TV channel for showing in it . Most of musician's this skill is God gifted but it can also learn and become master in music by practice also and earn what do you desire or want . You can also start this profession part time with your other profession , if your aptitude is to sing and perform music .

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Get Car loan from SBI under new ' SBI ezee ' scheme

Today, SBI has started new scheme for providing loan for purchasing cars . This is 'SBI ezee' for helping the middle class salaried person because SBI is providing car loan under
very low rate of interest of
8 % and without any advance equated monthly installment .


" Equated monthly installment which can say EMI is accounting term . If you do not know it we can simply explain it as fixed amount of installment which is given by a borrower to a lender at a specified date each calender month . In this installment both interest and principal of each month is included and it is given for specified numbers of years up to paying loan fully . "

There are following plus points of this new scheme.

• EMIs are just Rs. 1559


• Free accident insurance coverage


• SBI has contracted with maruti, Suzuki India , Tata motors and Hyundai motors under 'SBI ezee' car loan scheme .

Downside point is that both interest and EMIs will increase from next year .Otherwise this is the best scheme for getting Car loan and enjoy new personal car .

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Add new finance term in your dictionary – Financial inclusion

Financial inclusion is finance term. This term is used in banking sector. If any bank provides his banking services at very low cost to the poor people of any country. Then these financial services are called financial inclusion. This finance term is becoming so popular because every bank is doing some activities of financial inclusion.

We can include following banking services as financial inclusion:-

• Provide the facility to open free saving account to rural customers.
• Provide loan at very low rate to poor rural peoples of India.

Financial inclusion term is also used in govt. social work. Providing facilities free of cost to the poor section for upgrading them . Govt. of India is doing financial inclusion activities by operating Sarva Shiksha Abhiyan, Rural Employment Guarantee Scheme.

Objectives of Financial inclusion

According to UN the main objectives of financial inclusion are as follows:
Financial products like saving, short and long term credit, leasing and factoring, mortgages, insurance, pensions should provide to poor people at lower cost.

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Read new provisions relating to Service Tax variation

We know that from time to time Govt. of India revises Service tax . So , after revision or new amendments in service tax either service tax may be increased or decreased . At this time service tax variation are needed .

Under Service tax act , "Company can adjust service tax amount in future bill of customer . "


For instance : As per instructions from Govt. of India service tax had been revised from 12.36 % to 10.30% w.e.f. 24 Feb 2009 , but HFCL infotel ltd. takes payment of Internet service 16th . So , in 16Feb. 2009 , HFCL infotel ltd. charged service tax 10.30% instead of 12.36% . Now HFCL collected less service tax from 16 Feb. 2009 to 23 Feb. 2009 . This can be adjusted from customer in future . Now company adjust this in 16 May 2009 . The difference of service tax to be charged is 2.06 % from 16 Feb. 2009 to 23 Feb. 2009 under service tax variation provision


Suppose my Internet bill is Rs. 444


I will also pay service tax variation to above company


444 X 12.36 - 10.30 / 100 X 8/28 = Rs. 2.6 or Rs . 3


I will also pay current month service tax 10.30%

444 X 10.30% = 45.73

_________________________________

I will pay total of above amount = 492.73

___________________________________

Accounting Effect , if company will not apply the provision relating to service tax variation

1. Service tax is indirect tax , it means all burden of service tax liability is shifted on customers . If service tax variation provision did not apply , then this variation amount was given by company to govt. department . So , it will decrease company profit .
2. Because service tax variation is just difference between actual and old service tax amount and if customers will not pay that amount , customers profit will excess which is not tree and this is false window dressing of customers profit .
   

So , it is the duty of company that it should add customers bill as soon as company knows the difference .

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Find most popular Accounting Education Articles with back tweets and Google Docs

If you like read all popular contents of accounting education on twitter, this tutorial is very useful and tells you tricks for this .


For reading accounting education’s popular articles, you have to go backtweets and after this type accounting education’s site url http://svtuition.blogspot.com/ in backtweet’s search box . After this you can read all popular articles headlines which have published in Twitter.

You can read also accounting education feed in your google docs for this you have to apply following formula in the cell of Google doc’s spreadsheet

=Importfeed(http://feeds2.feedburner.com/AccountingEducationSite)

If you want to track blog popularity on Twitter with the help of Google docs , then watch following demo video

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ADB New investment plan - 2 billion dollars in Clean Energy project

Asian development bank will invest 2 billion dollars in clean energy project . ADB has already accepted of its 1 billion dollars in 2008 now , it is increased up to 2 billion dollars .

According to international institute for sustainable development 's PDF file , " $22 trillion dollars new investments are needed for reducing global temperature and CO2 and other dangerous gasses due to using of traditional biomass for cooking and heating by 2.4 billion people specially in Asian Continent . "

Read full report of IISD here .

According to International business Times ," Increase the amount of investment by ADB will dampen carbon growth and cut greenhouse gas emissions in the region. This decision will also aware other banks to perform social responsibility of banks "

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New amendment relating in income tax on Rent - July 2009

Central Govt. of India's finance ministry will present his budget in July 6 , 2009 and Govt. decided to amend the rules of income tax on Rent . Govt. wants to increase the deduction rate of tax on Rent due to recession in Real estate Industry . Urban development minister suggests to exempt income tax on interest on home loan up to Rs. 300000 . After presenting budget income tax on Rent may reduce from 30% to 50 % .

In my view , it will boost the real estate industry . Moreover , this deduction will provide benefits to Crores of middle class Indians who live in rental house and it will also increase the margin of commercial rental companies .

related Amendment in Service tax in 2009

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Do Cyber law Course with B.Com

Only B.Com. is not sufficient for making stable career . With regular B.Com. , you should also attempt different competitive examinations of Govt. jobs . Students who is doing B.Com. send the emails to me in which they want to know about other courses which can easily cover with regular B.Com. . You can now get latest updated information of competitive exam. from my new blog Indian Government Jobs .

Today , I am telling you about Cyber law course with your regular B.Com. Cyber law experts main duty is to find the fraud of Internet , email hacking , banking fraud , credit card fraud and online purchasing fraud etc. Today , these experts are most needed in every field . The syllabus of Cyber law course is mixture of technology and law regulations .

After completing it you can become forsenic accountant and auditor , or security officer or investigator in reputed company . Eligibility for getting admission is just 10+2 and it can easily with your commerce graduation .

After succeeding this course , you can get salary of 15000 to 20000 Rs. per month .
For getting more information of this course , you can visit the following universities .
School of legal studies , Himachal Pradesh Univ. Shimla (http://hpuniv.nic.in/ ), Department of law Delhi (www.du.ac.in ) , National law university , Jodhpur ( http://www.nlujodhpur.ac.in/ )




if you have any query relating to above information , you can send me e-mail now also at
vinod@svtuition.org

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Cheapest Airtel Net PC computer for Accountants and Commerce Students

Accountants who can not pay Rs. 20000 to Rs. 25000 for getting computer for doing independent accounting work . Now they can purchase cheapest airtel net pc . This computer is made by Bharti Airtel mobile Co. and its Cost is just Rs . 5000 to Rs. 7000 . This is the latested product of this company and middle class professional accountants can get benefit from this computer . It is small safe and also very low weight and Accountant can operate their accounts easily on this pc . Airtel will also provide you DSL broadband . Almost all the facilities are available in this

Connectivity

1 x Monitor
1 x Keyboard
1 x Mouse
1 x Network
4x USB Ports

One of most benefits of this computer to commerce students because , it Consumes only 5w of electricity , so students can easily study with this PC without any high expenses of electricity bill due to operating continuously computer .

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Count repeated words in your accounting lecture

Before giving any lecture on accounting topics , lecturers and professors of accounting have to prepare it and write it on paper . If you have Internet facility and you have to lecture specially in accounting topic , then before lecture , please check repeated words in it . Some time large number of repeated words do not create any interest in lecture . So , checking repeated words , you have to go to word counter tool and paste your written accounting lecture in the mention box and then just click go outside the box . After this you will find what are words are repeated and how many times these words repeated in your lecture .

After this you can change it with similar meaning words and create an interesting accounting lecture .

Wordcounter can be used also by writers, editors, students, and anyone who thinks that they might be speaking redundantly or repetitively -- and after all it is free of cost .

Yesterday's my article budgeting and its importance 's repeated words which is counted by word counter tool

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Now contact me at accountingfinancehelp@yahoo.com

If you have any question or suggestion relating to accounting education site . You
can contact me on my new yahoo id accountingfinancehelp@ yahoo.com

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Capital budgeting and its importance for investors

General people do not know that management accounting provides a very scientific technique which is very useful to select best investment projects. All people save some money for their rainy days. They are also interested to invest it in different schemes for increasing its principal amount. But due to ignorance of capital budgeting, they invest their money in risky and unprofitable projects and after these they lost all other good opportunity due to shortage of money source. Before clearing the concept of capital budgeting, I take a very simple example.

Mr. Sham is working as Engineer in XYZ Company and Earns Rs. 40000 per month and after some time; he saved Rs. 10, 00,000. Now he wants to invest it.

Saving and investment is two different things. Saving means save the money in your pocket or saving account at 3.5% annual interest but investment means to provide money to big corporate public and private companies for getting shares , debentures, mutual funds, public deposits and purchasing of machines for production . All these projects can give you high profit but also risk of loss of money also involves in these projects. Capital budgeting helps you to choose best investment project out of different choices with high profit at minimum risk. If you do not know the techniques of Capital budgeting, please consult Chartered Accountant or Financial Management (At least MBA finance qualified professionals) before investment of you high savings in any project. Basic Capital budgeting knowledge, you can also get from this article. In simple words, capital budgeting is a technique in which; investor compares profitability with the cost of projects. For this evaluation he can use traditional and time adjusted or discounted cash flow methods. After evaluation of various proposals, final approval for project is given. I also explain both methods of capital budgeting.

Tradition method

Under tradition method, Investor calculates pay back period of investment. Investor accepts that project whose pay back period is less than other project.

For example: - There are two project X and Y . Each project requires and investment or $ 20000. You are required to rank these projects according to the pay back period method from the following information: (pay back means estimated net profit from investment)

Project X
Estimated Net Profit from project X 1st year = $ 1000, 2nd year = $ 2000, 3rd year = $ 4000, 4th year = $ 5000 and 5th year = $ 8000

Project Y
Estimated net profit from project Y 1st year = $ 2000, 2nd year = $ 4000, 3rd year = $ 6000 , 4th year = $ 8000 and 5th year = Nil

Solution:

Project X

First of all we have to calculate annual net profit from project:-
= Total net profit from X project / no. of years = 20000 / 5 = $ 4000
Now The pay back period for project X
= total cost of project / Annual net profit from project
= $ 20000 / $ 4000 = 5 years

Project y

First of all we have to calculate annual net profit from project:-
= Total net profit from X project / no. of years = 20000 / 4 = $ 5000
Now The pay back period for project y
= total cost of project / Annual net profit from project
= $ 20000 / $ 5000 = 4 years
We should give project Y as first rank because , investor gets his cost of project with in 4 years which is less than project X’s pay back period , because that investment proposal is best which gives use recover our invested money in the short period .

Time adjusted or discounted Cash flow method

Net present Value method:

If you operate ms excel or Google docs in your daily life, then you have seen functions/formula of Financial with NPV. Its full name is net present value method. From my personal experience, most of all professional accountants use this method for selecting best investment proposal out of several investment schemes. Net present value technique is based on assumption, that today earned one rupees’ value is more than tomorrow one rupees earning. Under this method, we calculated present value of cash out flow (present value of cost of investment) and deduct it from the present value of cash inflow (present value of all future net profit). After this what we receive will be the net present value of any project. We must select that proposal of investment whose net present value is more than other project. Present value is calculated on the basis of discount rate which is available in market; it may 8% to 20 % on the nature of investment. If you do not use ms excel or Google docs, you have to find the present value from present value tables, it is just like log tables which is available on book shop.
For example from the following information calculate the net present value of the two projects and suggest which of the two projects should be accepted assuming , i discount rate is 10 %

formula of calculating NPV of investment projects

= Present value of Cash inflows - Present value of Cash out flows

or = PV of net profits - PV of total cost of investment

Suppose, there are two projects X an Y
Project X
Initial investment
$ 20000
Estimated life
5 years
Scrap value
$ 1000
The profit before depreciation and after taxes ( cash flows in $ ) as follows :-
1st year 5000 , 2nd year 10000 , 3rd year 10000 , 4th year 3000 and 5th year $ 2000
Project Y
Initial investment
$ 30000
Estimated life
5 years
Scrap value
$ 2000
The profit before depreciation and after taxes ( cash flows in $ ) as follows :-
1st year 20000 , 2nd year 10000 , 3rd year 5000 , 4th year 3000 and 5th year $ 2000

I have solve this problem with using NPV formula in ms excel and upload it in Google docs

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Do you know the cost of Death penalty representation ?

Death penalty information center provides the information of the cost of death penalty representation . It means if any body is in Jail and a case of death penalty is active in Court . If he will appoint any advocate for safeguarding himself , he has to pay highest cost for it . Its cost is $2 million . Public defender budget has increased from $1.75 million to $2.25 million due to paying for expert witnesses, forensic testing, the testimony of police, crime lab technicians and medical examiner's office personnel and the other expenses . Chicago breaking news center has given this news as the title of " Public defender: No money, no death penalty "
Watch also Richard Dieter's video in which he explained the reasons highest cost of death penalty representation.

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Cost of capital and methods of calculating cost of capital

Cost of capital is the minimum rate of investment which a company has to earn for getting fund .
When any company investor invests his money , he sees the rate of return . So , company has to mention , what will company pay , if investors provide their money to company . That average cost on the investment is called cost of capital . We calculate it with following way :-

Cost of capital = interest rate at zero level risk + premium for business risk + premium for financial risk

If a company has not power to earn , cost of capital , then this company can not get fund from public .

Importance of cost of capital


1. Basis of capital budgeting decisions:-


A company wants to invest his money in different project. Then it will compare their cost of capital and company will never invest his money in that project whose cost of capital is less than other project .


2. Basis of redesigning of capital structure :-


Cost of capital affects capital structure designing. Capital structure is just mixed of debt and equity sources which company wants to get from investors. At that time company selects that mixture of debt and equity in which cost of capital will be become minimum. With this company can increase the value of shares.


3. Basis of other decisions:-


There are large number decision & like dividend policy, interest policy which is depend on correct calculation of cost capital.

Method of calculation cost of capital:-


1. cost of debt



company wants to get debt from public, then calculating the cost of debt is the rate which calculated by dividing value of interest on loan with amount of principal.


a) cost of debt before tax adjustment



if company issues debentures on premium or discount , then for calculating cost of debt , principal amount will be adjusted with these amount . After adjust amount will be net proceed




b) Cost of debt after tax adjustment












2. Cost of pref. share capital


Cost of pref. share capital is rate which should company earn for paying dividend to pref. share holders because , it effects also the value of shares . With following formula we can calculate cost of pref. share capital





3. Cost of equity


Cost of equity is calculated with dividend yield method , or dividend yield plus growth rate method or earning yield method or realised yield method .



I) Dividend yield method :-


Under this method , company can calculate cost of equity on the basis of following formula





for example if the dividend per share is 10 and company issue 100 shares at Rs. 100 plus premium 10% then cost of equity


Ke= 10 / 110 X 100 = 9.9%


II) Dividend yield plus growth rate of dividend method :-









C) Earning yield method





4. Weighted average cost of capital


if we multiply all cost of capital with proportion of capital structure and divides with the total of proportion of capital structure % . After this what we receive is called weighted average of cost of capital .




Practical example of calculating weighted average of cost of capital :-

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Leverage and its types

Leverage is very scientific tool in the hand of finance manager . Finance manager uses this tool for making effective financial structure of company . Financial structure is just mix of debt and equity and with help of leverage , finance manager gets fund with effective ratio of debt and equity .

In simple word leverage is power and relationship between two interrelated variables . These variables may be output , sale , cost and profit . Finance manager calculates these leverage by apply formula and then uses them for taking decision in favour of company's shareholder . Main aim of leverage testing is maximize the earning of shareholder and reduce the risk of company.

Type of leverage :-


Company's finance manager tests three type leverage :-


1. Operating leverage is % change in earning before interest and tax divided by % change in sale . If company is charging fixed cost , the operating leverage tells the EBIT will greater than sale because due to increasing sale of fixed cost per unit will decrease and it will increase EBIT higher than sale .


Formula

Operating Leverage = % change in EBIT / % change in Sale


This leverage is very helpful for finance manager because , if operating leverage is more than or suppose it is two then it means if sale will increase 100% then earning will increase 200% . At this time , finance manager can get more loan for increasing the earning of shareholders .


2. Financial leverage


It is second type of leverage . Financial leverage is known as trading on equity . If any company's finance manager knows that company's return on investment is more than interest on loan or borrowing obligation . At this time , if company needs more money , then finance manager gets its loan and bought the asset from same loan . So, any technique in which any asset is purchased with loan and trying to increase EPS , then this is called financial leverage .

Formula for calculating financial leverage

= % change in Earning per share / % change in earning before interest and tax

= % change in EPS / % change in EBIT

This formula explains the relationship between % change in EPS and % change in EBIT and after deep study of this financial leverage , finance manager decides to get appropriate loan for buying assets .


3. Combined leverage


It is the product of operating leverage and financial leverage .

Combined leverage = Operating leverage X financial leverage

= % change in EBIT / % change in sale X % change in EPS / % change in EBIT

→ High operating leverage and high financial leverage combination is high risky for business .
→ Good combination is that in which lower operating leverage with high financial leverage .

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Understand Trading on equity

Trading on equity is technique in which a company gets fund from debt sources or borrowing and company knows that his return on investment is more than fixed interest charges. With this earning per share becomes highest without any risk of bankruptcy or fear of high cost of capital. This technique was used in uk first after industrial revolution and professional finance manager guides company, how can company increase E P S without decentralizing of powers.
Condition of trading on equity:-

1. R O I >fixed interest charges
   


2. Company get loan and utilize it in business.
   


3. Major part of capital structure must be long term loan.
   

Benefit of trading on equity:-

Main benefit is to owner of company because if company gets loan at loaner rate, EPS will increase and it will increase also dividend per share and value of share.

Different between trading on equity& equity trading:-

Trading on equity is just technique in which proportion of debt contents are increased in capital structure but equity trading is sale and purchase of shares in stock market. investor are interested to buy those shares whose R O I is more than fixed interest charges because investor can excess amount of profit in the form of dividend and it will also increase the price of shares.

Trading on equity v/s financial leverage:-

If a company buys asset and its purchase price is paid by getting loan, then this system of trading on equity is called financial leverage. If we read the meaning of leverage, it means power. Because company knows R O I is more than fixed interest charges, then company’s board of directors tries to increase their financial power by purchasing all assets with the help of long term debt and increase their profit with this system.

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Useful features of Google fusion tables for Account managers

Today(11/06/2009 ) , Google has introduced a new product Google fusion tables . It is different from earlier Google's software of Google docs because there are large no. of features in Google fusion tables which are very useful for finance managers and these features and benefits can not get from Google docs . You can read these in the following way :

1. With Google fusion tables , Account manager can view large excel spreadsheet on Internet . It will be useful when Account manager wants to watch old financial data of own and competitor companies together . This feature is available in this new software . Thanks Amit Agarwal





2. Filter option is available in Google fusion table , it means now , you can check your result by apply filter .

Suppose , if you want to check one debtor's detail in your excel sheet in Google fusion table you can apply filter and get result .

Earlier this option is not available in Google docs . Fliter option can be explained with example , Suppose you have an excel sheet of 500000 debtors detail , but google fusion table shows only 100 rows at a time so you can use filter less than 100 rows and check all the data in google fusion table .









3 . Account manager can manage accounting data and databases in Google fusion tables effectively because visualize all the data with graphs , pie chart , map and bar graphs also in google fusion tables also .




Google operating system has published also " manage data base google fusion tables - article " which is also so educational thanks Alex Chitu

4. Account manager can also you invite his subordinate in Google fusion table collaboration and get support from him for doing accounting work .

5. You can also import your all google docs spreadsheet in Google fusion tables and redesign it what do you want .

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Factors which affect capital structure of Company?

Capital structure may be defined as the mixture of resources of company in which include equity share capital, pref. shares capital and long term debts. It is the duty of finance manager to make finance structure of company and provides the fund for completing the need of company in short period and in long period. But before choosing appropriate proportion of capital sources in capital structure. Will you consider the different factors which affect capital structure of company ? 
Analyze these factors of capital structure and then make best structure of capital in your balance sheet.
Finance manager has to redesign capital structure of company with effective way so that shareholders wealth become maximum and cost of capital becomes minimum. There are three points , elements and factors which affects capital structure .


First – Risk


Risk means risk of insolvency or bankruptcy. If company takes loan in the form of debenture or other long term loan , then company has to pay fixed charge in the form of interest and it must be payable , even company earns profit or not and company also repayment of this loan because , this is secured loan and if company will not repay that amount , creditors can sell the assets under mortgage and collect their money . So , if company faces financial crisis , then higher proportion of debt content in capital structure may dangerous for company.


2nd Cost of Capital


Second point also must be considered by finance manager, what is the cost of capital, company should try to collect fund from that resource whose cost of capital must be minimum from other resources. If company gets fund debt and pref. shares and pay high cost of capital, then it may possible that equity shareholders also demand for higher dividend . So, remember also this point before selecting any resource as company’s capital structure part .


3rd Control


If company issue only further equity shares for getting fund , then new shareholders also can vote for selecting board of directors and controlling power may go to other hands . For stability of company , it is very necessary to choose optimum mix of resources so that control must be in same hand for consistency in the decisions of company.

We can explain optimum and appropriate capital structure with following example

Suppose if a company earn $ 10 before interest 1% , tax 50% after interest and pref. dividend 50 % after interest and tax charges on profit and if company needs 100 $ , company already has 100 $ equity share capital . Company is free to decide to get this fund from any one of different resources like issue of equity shares, or issue of pref. shares or issue of debenture. We will show that in which alternative the earning per shares will be highest.

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World famous USA Stock Exchange - NASDAQ

National association of securities dealer’s automated quotations is also known as NASDAQ. It is famous stock exchange of USA. It was established in 1971 and its head office in New York. It is operating 8 branches in Europe. 1/3 part of Dubai stock exchange is of NASDAQ. World’ largest transaction in the volumes of shares is dealt in this stock exchange.


No. of companies listed in NASDAQ

3200 companies are listed and trading in this stock exchange .


System of working


In this stock exchange all work is done online (Electronic way) . http://www.nasdaq.com/ is the official site of this stock exchange. If you want to see live result of NASDAQ, then you can see it just type nasdaq live on Google search engine.

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Why am I not getting free newsletter of Accounting Education Site ?

I have obtained one query from Internet user who has written the email address in left side box of " enter your email " and he also clicked sign up and write verification code and again clicked on subscribed me but he is not getting email . If you are also facing this problem , then solution of this is very simple .

After completing the process , check your email account , you will obtain feedblitz email in your inbox or some time it may possible that it goes to your spam box . We are sending email newsletter with the help of feedblitz . So , after opening the email , you have to click verified link for completing the process of subscription .After this you will get the headlines of Accounting education through your email also when any new content is published in Accounting education site .

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Know more about OTCEI

OTCEI is famous stock exchange which is founded and incorporated in 1990 in Mumbai under Indian company act 1956’s section 25. This stock exchange is allowed to all unlisted companies (Who is not listed in BSE or NSE) to trade in shares and it provides more facility to companies to list in OTC exchange of India. It is also the institute which provides the sources to the valuation of securities. This stock exchange is also active in US by online system of buying and selling of shares and other securities. It also provides the facility to NRI to invest their money in reputed companies under IPO system. It is affiliated stock exchange under Securities contract act 1956. Presently 115 companies are listed under OTC


OTCEI Motto

"To assist in efficient capital formation by developing a vibrant, dynamic and self-regulated capital market conferring benefits to the investors, issuers, capital market and the nation at large."

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List of Indian Stock Exchanges

I have given bellow the list of Indian stock exchanges with the detail of cities which these are situated and time when these were established .

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National Stock Exchange (NSE ) - Backbone of Indian Capital market

NSE or National stock exchange is the largest stock exchange in the city Mumbai. It is the second stock exchange in world whose growth rate is 16.6%. It was established as company in 1993 and in 1994 it converted as stock exchange where all type of investors can deal in shares and long term loans.

It is also reputed place for whole debt trading (WDT). Capital market of Companies listed have reached at $ 1.46 trillion. It means if we visualize this money, it is 10’s power 12 ($ 1,000,000,000,000) for 1 trillion and + 0.46 trillion also included one trillion. We can visualize this amount in following picture when a man stand in the front of this amount , he looks like a small ball . So , NSE is backbone of Indian companies' finance and capital market .





Trading time


Trading time in NSE is started from 09:55am and closed at 03:30pm. Saturdays and Sundays are the holiday.



Educational Services


National stock exchange (NSE) is also operating educational services . It has started Certification in Financial Markets


Updated position


According to Business Standard 04/06/09, “NSE has gotten 26% 26 foreign direct investment (FDI). That is good sign of the reputation of NSE. Thanks INDOLINK Consulting
There are also following top five companies who gain from this capital market in 8 June 2009 .

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Five Differences between money market and capital market

1.Money market is a place where banks deal in short term loans in the form of commercial bills and treasury bills. But capital market is a place where brokers deal in long term debt and equity capital in the form of debenture, shares and public deposits.

2.In money market maturity date of repayment may after one hour to 90 days. But in capital market, loans are given for 5 to 20 years and if issue of shares by co. , its amount will repay at winding of company . But investors have right to sell it to other investors if they need the money.

3.Rate of interest in money market is controlled by RBI or central bank of any country. But capital market’s interest and dividend rate depends on demand and supply of securities and stock market’s sensex conditions. Stock market regulator is in the hand of SEBI.

4.Main dealer of money market s are commercial banks like SBI, ICICI Bank, UTI and LIC and other financial institutions. Main dealers are all the public and private ltd. Co. and more than 30 million investors. It is increasing trend due to opening of online capital market.

5.In USA, money market is famous with dealing of money fund and banker’s acceptance instruments. But capital market in USA is famous with New York stock exchange and stock regulator is Security exchange commission (SEC).

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simplified definition of capital market

Capital market is that part of financial market in which trade of long term debts and securities are done by brokers and it includes share/stock market and bond market. The buyers are general public, middle investors , companies and brokers who are interested to invest their money for getting profit in the form of interest or dividend and profit from bargaining . Capital market is source long term funds for companies because any company who started his business can sell their shares in the primary market of capital and next time, this company is allowed to sell in secondary market. Buyers are also allowed to sell their bought shares in any time. Every country has made the control power for capital market. In USA, its name is Security exchange commission who control capital market. It established in 1934 but in India capital market controller name is Security exchange board of India which established in 1992 after Harshad Mehta Scam. India’s capital market is so wide and more than 30 millions investors have invested their money in Indian capital market. BSE and NSE are the famous stock exchanges in India like New York Stock exchange in USA .

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Money market - The way of Indian development

Money market is the part of financial market and one of important concept of Finance because finance is flow of fund and money market provides system for flowing of funds and commercial papers. In simple words, money market is that market in which short term commercial papers are bought and sold and short term loan are given and taken. Main dealers of money market are the banks and financial institutions who need fund in very short term and they can not take this fund from capital market because in capital market, they can only receive long term fund with huge amount of loan and share capital.

So, Money market is so important for Indian developments because sometime banks need money for paying their customers, they can get this short term loan from Indian money market.

Rate of short term loan is high than long term loan of capital market. SBI, ICICI bank, HDFC bank, UTI and LIC and other commercial and financial intuitions are the main dealers and they deal in commercial papers.

Main instruments of Money market:-


Instruments mean short term assets which can be include following


☼ Commercial papers


in commercial papers , promissory notes , bill of exchange are included .


☼ Treasury bills


Treasury bills are the bills which are issued by central Govt. of India. They can be bought or sell like commercial papers.


☼ Bankers acceptance


Banker’s acceptance is also the form of short term assets on the basis of short term loan can be taken.


☺ Money fund


Money fund is also main instrument of money market. This fund which can be used for fulfilling the need of banks to repay customers.


Indian money market is most affected by interest rates, rate of foreign exchange and other related factors. Short term loan is one of factor for development of India because , banks and financial institution can work effectively , if Indian money market is so active with providing short term loan at lower rate of interests and also provides call money loans for one hour to one day. It will be helpful to Indian bank to avoid tension for providing money in shortage of fund period .

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Profit and Loss Account Chart

Profit and loss account chart is the easiest way to show your performance to your investors to attract them to buy their shares . General investor do not know the complexive income statement and he can take wrong meaning of any item in income statement , So , it is very necessary to share whole income statement in Charts .

I have earlier written tutorial of how to make pie chart for showing the items of profit and loss account but today , I will tell you the procedure of making 3 D bar chart of profit and loss account .
For this , you have to write all the item of profit and loss account in vertical form in google docs , if you have made profit and loss account in ms excel , then you can upload this file in google docs and then select all the items of profit and loss account , after this , you have to click insert and then click chart and select 3D bar chart for presenting profit and loss account .

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Working of Stock Exchanges in India

Indian stock exchanges are working before independence of Indian after revaluation of industry in west, English investors started to deal
in shares in Indian stock exchanges since 1875. They started to deal first in India’s economic and business center Bombay. For this they had established Bombay stock exchange in India in 1875 with the name of “The native share and stock brokers association ”. There were just 318 persons who became members of this association.

Slowly the no. of members and trading in this stock market was increasing and in 1956, BSE became reputed market after providing powers of capital market by passing securities contract(Regulation) act1956 and also after making of new economic policies in 1991 by Dr. Manmohan Singh( slogan of liberalisation , privatisation and globalisation ) .

No. of stock exchanges were increases and national stock exchange was also established in Mumbai in 1993.

From 1875 to 1995 working of stock exchanges in India was fully dependent on paper shares, debentures and bond. It means for completing dealing physical delivery of shares was necessary.
But from 1995, online dealing in shares, created online stock markets in India. One side, we are seeing the developments and progress in stock exchanges in India but other side after Harshad Mehta scam, we watched downfall in the progress of stock exchanges in India. Harshad Mehta was a player who rendered fraud in Indian stock market by including private bank in fraud scheme. He dealt 200 million shares of 90 companies and millions of Dollars loss was suffered by small and middle investors when scam was publicly opened and sensex dropped 570 points.
Govt. of India had taken good action for prohibiting such scams by establishing SEBI in 1992. This board played a great role to develop and to secure the investors of India. After this India stock exchange again because attraction point of international investors.
SEBI made rules in which all transactions will be settled on daily basis and there will be zero level fraud and scam in stock exchanges in India.

Now stock exchange changes fully in India. For dealing in stock exchange, any person needs Demat account and SBI and Karvi are working as online stock exchange broker in India .


Main benefit of e-stock exchanges that now NRI can sell and purchase without physical transferring of shares , all dealing are taken place online and sale and purchase price of shares are transferred by cheque or by e-banking facility .


This new form of stock exchanges in India opens new business in each and every home which is connected with Internet.


Indian stock exchange trends are showing upward sensex from last 2008 when USA market fell due to financial crisis but India saved easily from this crisis and a very small effect was on Indian stock market .

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Security Exchange board of India(SEBI ) and its powers

Security exchange board established in 1992 by passing the ordinance in the parliament of India. India’s first law relating to control over security was Control Security issue act 1947 but, it was not fulfilling the desires of Govt . and investors.
For securing the interests of Investors, SEBI has established by Central Govt. In India, now it is vital authority to makes all rules and regulations relating to capital market. Main aim and objectives of SEBI is to protect the money of investors from frauds in stock markets. A new investors can easily cheated by expert brokers, So, SEBI knows this point and it has made very strict rules for ceasing such cheating , frauds and malpractices .

SEBI never accepts any dodgy transaction which is done by any party in stock exchanges in India. SEBI is the board which is operated by one chairperson and other members which are appointed from following way.

• One member is selected from the officers of ministry of finance.
• One member is selected from the officers of ministry of law.
• One member is selected from the office of RBI.
• Other two members are selected by central Govt.
  
  Powers of SEBI
  
  

1. To make rules and regulation for controlling the stock exchanges in India.
2. To educate brokers and investors.
3. To do amendments in the rules and regulations of stock exchanges in India.
4. To encourage investors of foreign to investment in India.
5. To safeguard the interests of investors.
6. To development the stock and share market in India.
7. To stop all fraud and malpractices in stock exchanges.
8. To reduce the fluctuations in the market prices of shares.
9. To create good relationships among the large numbers of brokers, finance agents and financers.
10. To provide license to brokers for activities in stock exchanges in India.

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One new development in Finacle Software

Finacle is software which is used in solution of e-banking and almost all the major big cities’s bank are using finacle for recording the transactions which is the best
product of infosys ( One of best IT company in India ) .

Now one new development in finacle software is announced . It will provide the facility to connect rural banks also . PNB has contracted and under this contract 1300 branches which are in rural area will also connected with finacle software . interesting story of PTI

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Debit and Credit PowerPoint presentation

adamkasi, the user in slide share has tried to explain debit and credit in this presentation . Debit and credit are the basic rules for recording any transaction in journal and ledger accounts .

Debits And Credits

View more OpenOffice presentations from adamkasi.

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Social accounting and its objectives

Social accounting may be defined as identification and recording of business activities regarding social responsibility. Social responsibility concept is the one of the important concept of management . It is the duty of enterprise to do some social activities for completing their social responsibility .
Social accounting is very important tool to measure the performance of any company in view of social responsibility . Company has to make social responsibility income statement and balance sheet . But it is not compulsory to make these statements .





France , UK and USA are the top countries where social responsibility statements are made with other financial statements . In India social accounting is not so popular but some India companies are now focusing on social responsibility and also started to make social report for calculating to total cost and benefits for performing social responsibility .

Objectives of social accounting

Main objectives of social accounting are to help society by providing different facilities by enterprise and to record them. We can write them in following points


1. Effective utilization of natural resources


Main objectives of making social accounting is to determine whether company is properly utilize their natural resources or not .


2. Help to employees


Company can help employees by providing the facility of education to children of employees, providing transport free of cost and also providing good working environment conditions .



3. Help to society


Because companies' factories spread the pollution in natural society which is very harmful for society . So , enterprise can help to society by planting the trees , establishing new parks near factory area. and also opening new hospitals


4. Help to customers


In social accounting this the part of benefits given by company to society , if company provides goods to customers at lower rate and with high quality .


5. Help to investors


Company can help to investors by providing transparent accounting information to investors .

Because of many objectives are related to safeguarding of natural resources so this accounting is also known as Social and Environmental Accounting, Corporate Social Reporting, Corporate Social Responsibility Reporting, Non-Financial Reporting, Sustainability Accounting

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Simple definition of dodgy transactions

Dodgy transactions is the finance term which is used in stock / share market . If any broker who is banned by SEBI and continue to deal in shares by his friends brokers and with the companies' link , then these manipulative transactions are called dodgy transactions . One of latest example of Rogue stockbroker Ketan Parekh and you can read full story about his dodgy transaction in telegraph newspaper .

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Effect of decreasing inflation by 0.48%

There are following effect will be on the food products due to decreasing inflation by 0.48%

• You can hope that prices of food product will not more increase in next week and because wholesale price index drops by 0.48%
• Inflation trend may drops further because of starting downward trends of inflation .
• Indian middle Consumer can get relief from the tension of increasing the prices of necessary goods .
• But more inflation drops after arriving monsoon middle or end of June 2009 .
  

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Difference between TDS and TCS in Tally 9

If you are operating tally 9 at its advance level, then you have already known what is the difference between TDS and TCS. Both are the statutory and taxation feature and both is used pursuance of the provision of TDS rules and TCS rules of income tax act 1961.

Differences between TDS and TCS

1. TDS means tax deducted at source and TCS means tax collected at source. One of main example of TDS is amount of tax deducted from employee's salary . When an employee gets salary , it is duty of employer to deduct tds from his salary and deposit it in the account of Govt. When company pays salary , all salary is not given to employee but company's employer deducts tax from this payment , so tds is also part of company's expenses .It is also duty of employer to deposit this amount to the specific bank which is authorised by Income tax department . But there are also other payments like interest or commission on sale lottery tickets or brokerage or payment to contractor and subcontractor etc. But many other cases when company received certain amount, at this time tax amount is collected from employee and so it becomes TCS , Suppose , if company sells forest products and gets money with tax collected at source , this is the part of revenue .
2. There are two button in Tally's statutory and taxation feature one is for TDS and other is for TCS , So , there are facility for using both facilities you have to write yes in both button because both are different from accounting point of view

3. Suppose Manoj is our debtor and we sell him forest product so , we have to write yes in apply tcp in the ledger creation of manoj .


4. When we have to pay sohan who is our creditor because we have to give commission on sale ticket so we have to write yes i n front of is TDS applicable in the ledger creation of sohan


5. Voucher entry of TDS will be in the payment voucher . Suppose if we have to pay Sohan 14000 , then we have to 10000 net and 4000 will transfer to TDS account ( Before making the voucher entry , ensure that you have made TDS account under Duty and tax group.)
6. Voucher entry of TCS will be in receipt voucher . Suppose we have gotten 14000 from manoj for sale of forest product , then you have to net receipt 10000 from manoj and other 14000 will transfer to TCS account .

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Test your performance with responsibility accounting

Responsibility accounting is a new system of accounting that will help you test of your performance across a variety of departments and segments .

Responsibility accounting is making of cost sheet under different segments or centers .so it is so easy to determine each employee’s responsibility.

There is also other benefit which can be explained following way:-

Easy calculate the performance of employee:-

Because we have already divides organization in small division of four and five employee’s group and each group or division are responsible for doing any work. So it is easy to determine what their performance is.

We can explain it with following example

A B C is company which is using responsibility accounting system. From above sheet we can see that 2nd divisions performance is better than 1st division’s performance because cost of 2nd division is less than budgeted cost and it is sign of good performance. We can take action against 1st division under the effective control system.

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See the steps of the system of Responsibility accounting

Responsibility accounting may be defined as a type of management accounting in which information of responsibility centres are collected and on these information , the responsibility of each employee of company is determined .
Under this system of accounting whole organisation is divided in responsibility centres and powers are given to each employee to do specific work and his performance is recorded and on his performance his responsibility is determined . This is the technique of budgetary control .

Steps taken for establishing the system of Responsibility accounting

1st step

Division of company into departments

For calculating the responsibility of each employee , whole company is divided in segments , departments and different responsibility centres and in these responsibility centres , we also given different names like investment center , profit center and cost center .

2nd Step

Determination the objective of each department

Company's above authority designs different objectives and standards of each and and every department . These works have to do by each employee in that specific department .

3rd Step

Calculation of Actual performance

Under general accounting system , company calculates the actual performance of each employee and this will be recorded under different responsibility centers .

4rd step

Comparison of Actual performance with standards and targets

Company compare each department's employee's actual performance with their targets .

5th Step

Calculate the value of Variance

After this company calculate the value of employee's actual and standard performance's variance . It may favorable , if actual performance is better than target which is fixed by company.

6th step


Corrective measures

Because this is the main aim of responsibility accounting to control each center , so if the employee's performance is negative , corrective measures are taken by company . It may in the form of transfer , suspension or training to employees .

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Fees record of School - Advance Calculator download now

I have made one fees record of School's advance calculator in ms excel . It is made by using filtering and freezing options in ms excel and main benefits of recording your fees of school in it , you can see different student's detail , his deposited fees and for what duration and at what date he paid his fees . You can easily make other calculator like employees' salary record calculator and other receipt calculator by just changing heading in ms excel . For downloading click here .

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