Why are Adjusting Entries Important ?

Adjusting entries are the part of journal entries and every business organisation makes adjusting entries in the end of accounting period . These entries are so important because after this net profit or loss and financial position can be recognized in same accounting period . Because , these transactions or event happens usually at the end of an accounting period , so , accountant has to pass them when these actually occurred .

1. Adjusting entry of closing stock is needed to determine the correct value of gross profit and cost of goods sold . After passing this adjusting entry , closing stock will go to credit side of trading account and after this gross profit can be calculated .
2. Adjusting entry of depreciation is needed to determine the correct value of net profit , fixed asset and financial position. Because we can not pass this entry regularly because depreciation only come into existence after use of fixed asset .
3. Making adjusting entry of outstanding expenses is also very necessary because , it will show the correct amount payable to third party and will also show the correct expenses for the period because in this entry we have to debit expense and credit outstanding expense for third party account .
4. Making adjusting entry of advance expense is also very necessary because after this we can deduct advance expense from expense and this will be charged in next accounting period when these expenses will due .
5. Making adjusting entry of accrual revenue and advance revenue are very important just like outstanding expenses and advance expenses because it direct effect will be the final account , unearned or accrual revenue means revenue earned but not yet received in cash , after recording it as adjusting entry we can add it in current period respective revenue and it will show correct net profit and we can also add it as asset of business. Advance or unearned revenue's adjusting entry is debit revenue account and credit advance revenue account . It means decrease the value of revenue with same amount in profit and loss account because all revenue accounts are credit under third rule of nominal account but this entry will be helpful that we can show it as revenue when we earn it in next accounting period .

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Simple Graphs of Online Advertising Cost Trends (CPM)

The following graphs are showing the trends of Online Advertising Cost. Online Advertising Cost's other name is Cost per mile or Cost per one thousand page impression (CPM). Actually, advertiser is responsible to pay either cost per click or cost per thousand page impression. The trends are last 9 months of 2009 and divided into three parts quarterly . Almost all the cost has been decreased due to global slump. This loss will have to bear to all web publishers and bloggers.

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What are the Advertising Expenses and its Exceptional Cases ? Are These Capital Expenditures or Revenue Expenses ?

All expenses which are given for advertising or Ads. Every company wants to sell the products or provide his services to customers but problem is that how to increase the sale or customers. Solution can grant by advertising companies. These companies render the services of advertising. So , all expenses which are given for newspaper , TV , Radio , Business card , Yellow card  ads and Online banner for sponsored links are

called advertising expenses . These expenses also include the cost of employee who works for mouth advertising of company. This is selling expenses and will be credited in profit and loss account of company. There are following expenses with this company or enterprise can promote his business or profession but it does not include in advertising expense .

Following are not Advertising Expenses

1. Expense for Wedding ( Personal )

You may not deduct costs as advertising that are primarily personal, even though they may have some promotion value. For example, if your daughter is getting married and you invite some of your best customers to the wedding, you can't deduct the wedding costs.

2. Cost of  Website as Shopping Cart

        If you use your web site for selling your product (having a shopping cart, for example), this is a cost of selling and will not include in advertising cost.

Exceptional Cases of Advertising Expenses

·        Capital Nature Advertising

Some Company have big budget for one year advertising. It may possible that it will be more than 20% of total paid up capital of Company. So, Company can include it as asset.

It will be transferred to profit and loss account over the period of benefit of advertising.

·        Before Running – Prepaid Advertising

If any company paid any amount for advertising before running of ads, then it will be asset and will be shown in balance sheet. If ads are running then it will become as revenue expenditure and will be shown in income statement . Via

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Difference Between Cash Method and Accrual Method of Accounting

Ist Logic

☼  Pass the Accounting Entry in Day book only when any expenses paid in cash/ check  / credit card or when income received in cash / check / credit card under Cash method of accounting 

☼  Pass the accounting entry in day book only when any expenses due or any income receivable on maturity date under accrual method of accounting

2nd Logic

☼   U.S. federal Law of  income taxes  allow only cash method of accounting

 ☼   Indian Income tax law accepts accrual method of Accounting .

3rd Logic

☼ The all-events test, under U.S. federal income tax law, is the requirement only taxpayer who are using accrual-method of Accounting 

☼ No need to clear all event test to the taxpayer who are  using cash method of accounting .

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What is Accrual Basis Of Accounting

This is the method of accounting. In this method we record all incomes on the basis when we sell the goods or perform our business duty. It means we earned the money and it will be the part of our business revenue and
even if we could not receive the money in cash form.


Effect on Final Account

In profit and Loss Account

Particular income received in cash or bank       XXXX

Add Income earned but not received       (+)    XXXX

Less Unearned Advance Income            ( - )    XXXX

__________________________________________
Total income shown in the credit side of
 profit and loss account                                 XXXX
­­­­­­­­­­--------------------------------------------------------


In Balance Sheet

 All  Income earned but not received will be shown in asset side and add in current asset


All Unearned income but received in advance will be shown in liability side and add in current liability .

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Difference Between Straight Line Method And Diminishing Balance Method

The following graph is taken from How to Site's Article Diminishing Balance Method     . I have liked this graph  to explain the difference between Straight line method and Diminishing balance method . Both methods are of Calculation the amount of depreciation in financial accounting  .


In straight line depreciation method , depreciation is charged on fixed asset with fixed rate . Suppose depreciation Rate is 10 % and Fixed Asset is 10

In the end of first year will be the depreciation = 1 and rest fixed asset will be 9

In the end of Second year will also depreciation = 1 and rest fixed asset will be 8

So , Graph will show the straight line  . So , this method is famous with this name due to this reason. In other words we can say that the amount of depreciation will equal in first year or in end of asset .

In diminishing balance method , depreciation is charged on the amount of fixed asset after deducting previous year depreciation

Suppose fixed asset is 10

Then depreciation of first year at 10% = 1

balance of fixed asset at the beginning of second year =9

now depreciation will charge on 9 not on 10

So  9 X 10/100 = 0.9

now the balance fixed asset in the beginning of third year will be = 8.1

Now again depreciation will charge on the amount of 8.1

So , slop of curve under diminishing balance method  will not straight line but more upward in left side .

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How is Data Synchronization Possible in Tally.ERP 9 ?

Synchronization is the process of making copies of data between two or more computers using Tally.ERP 9 in a Client – Server environment. With Tally.ERP , it is so easy to transfer the data to client's computer .

Availibility : Tally.ERP 9 Single User & Multi User


Ist Step
Configure Server for Synchronization

To configure the Server Company for Synchronization, follow the steps given below:

Go to Gateway of Tally > F12: Configure > Advanced Configuration


In the Advanced Configuration screen,

Under Client/Server Configuration section,

1. Set the option Tally is acting as to Server, to run Tally.ERP 9 as Sync Server
2. Specify the required port number (e.g. 9009) in the Port field.

Tab down to Tally Sync Configuration section:

1. Set the option Ignore Clients modified Voucher Type Masters to No, so that modifications made to Voucher Type Masters on the Client are updated on the Server
2. Set the option Enable Sync Logging to Yes, to generate a Log file which contains synchronized vouchers and is saved in the Tally folder.
3. Set the option Truncate previous log before Syncing should be set to Yes, to allow the previous log file to be overwritten by the current log file.
4. Go to end and press Enter to save the details.
   For the above changes to take effect, Tally.ERP 9 will prompt you to restart the application as shown:
5. Press Enter or select Yes to restart Tally.ERP 9 on the Server computer.
   Tally.ERP 9 will restart and in the Information Panel you can see that it is configured as the Sync Server as shown below.
   

2nd Step
Configure Client for Synchronization

To configure the Client Company for Synchronization, follow the steps given below:

Go to Gateway of Tally > F12: Configure > Advanced Configuration
In the Advanced Configuration screen,

Under Client/Server Configuration section,

1. Set the option Tally is acting as to Client, to run Tally.ERP 9 as Sync Client
   Tab down to Tally Sync Configuration section,


2. Set the option Ignore Servers modified Voucher Type Masters to No, so that modifications made to Voucher Type Masters on the Server are updated on the Client


3. Go to end and press Enter to save the details
   For the above changes to take effect, Tally.ERP 9 will prompt you to restart the application.


4. Press Enter or select Yes to restart Tally.ERP 9 on the Client computer
   The Tally.ERP 9 is Configured as the Sync Client as shown in the Information panel

3rd Step
Create Sync Rule on Client

To Create the Sync Rule on the Sync Client for Direct/IP Sync, follow the steps given below:

1. Select the Company for which the data needs to be synchronized


2. Go to Gateway of Tally > Import of Data > Synchronization > Client Rules > Create


3. In the Client Rule Creation screen,

• Enter required Sync rule name (e.g. Sync with HO) in the Name of Rule field


• Set Use Tally.NET Server to No (By default it will be set to No)


• Enter the Static IP Address of the server in the Server URL field along with the Port Number (e.g. 192.168.5.137:9009).


• Set Secure Server to Yes or No depending on whether the Server Computer is listening in the Secure mode or not.


• Username and Password should be provided when Set Secure Server option is enabled.
• Use Compression should be set to Yes if you want to compress the data during the Sync process. This will help to speed up the Sync process.


• Select Synchronize in the Type of Rule field.
• Enter the name of the Server Company in the Company Name on Server field.
• Select Yes for Synchronize Altered Transactions.
  Select Yes for Sync over slow connection.
• Press Enter to save the Client Rule Creation screen.
  

Details of other fields

Secure Server

Enter Yes in this field if you are synchronizing to a secure server. Entering Yes here gives you the option to enter your user name and password.

1. User Name - Enter the user name you use to connect to the server.


2. Password - Enter the password for the specified user name.
   

Use Compression

Enter Yes in this field to compress the data that you send to the server. Use this option to reduce the size of data files which synchronize and transfer data.

Synchronize Altered Transactions

To send altered transactions to remote clients set this option to Yes.

Sync over slow connection

If this option is set to Yes, Tally.ERP 9 will send the vouchers in multiple small batches rather than in one big batch and will not time out if the connectivity is poor. This option must be set to Yes in most cases.

If this option is set to No, the sync process takes a longer time as data are sent in multiple batches.

Company GUID on Server (Read-Only)

Displays Company's Globally Unique ID

Current TID (Read-Only)

Displays the creation ID of the last synchronized voucher of the remote company. This id is generated to identify new transactions created at the remote end.

Altered TID (Read-Only)

Displays the altered ID of the last synchronized voucher of the remote company. This ID is generated to identify altered transactions at the remote end.

Is Active (Read-Only)

Displays Yes if the Client Rule has been activated by the server.
Remote Alter State (Read-Only)
Specifies whether Synchronize Altered Transactions is Yes or No on the server side for that particular client rule.

4th Step

Establishing a connection from Client

To initiate the connection (handshake) process from Sync Client,

Go to Gateway of Tally > Import of Data > Synchronization > Synchronize



5th Step

Activate/Enable Sync Rule on Server

During the Handshake process, the Sync Rule is transferred from Client to Server. To Activate/Enable the Sync Rule,

Go to Gateway of Tally > Import of Data > Synchronization > Server Rules > Activate

1. Select the required rule from the List of Rules based on the Client Company Name as shown:


2. Press Enter to select the Rule
   
3. In the Server Rule Activation screen,
   

• Select Is Active to Yes to activate the Rule


• Select Yes for Synchronized Altered Transactions, to allow the altered transactions during Sync

You can continue using the Synchronization once Server Rule is activated.
After Data Synchronization is completed, Client displays the status in the calculator panel as shown:

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Use Accounting Information to Make the Decisions in Marketing

Marketing means all effort to make new customers and satisfy them. In other words, to do marketing is the aim of business. Accounting and its information can be used in marketing decisions because company's profile can be present with company's earning and profitability capability and its financial stability. These financial reports and statements can be published in newspapers and online. Large numbers of our customers are interested in this accounting information. On the basis of this accounting information, they can decide to invest company. Moreover, today customer is also interested to know solvency and liquidity of business. All these information can come from accounting.

Major marketing decisions are also effected with accounting. Suppose, company wants to invest $100000 in his second branch's marketing promotion. But this decision needs accounting information. We can make its detail.

1. How much expenses were incurred in last time marketing promotion?
2. What amount of ROI, we got from that branch?
3. What amount of return on investment in specific type of advertisement?
4. Have we collected the entire balance amount from debtors of that second branch?

Like above, other accounting information is useful to make the decisions in marketing. Every day, we are seeing that techniques of marketing are being changed. You can see advertisement on the temple when any religious program is started. We are seeing verities of advertisement; we are seeing different behavior of consumer. So, company has to take many flexible and short period marketing decisions. These decisions are done on previous month accounting information of sold inventories. If accounting and financial department work together, after this, decisions of marking can be easily taken by marketing managers.

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How to Reduce Stress of Examination ?

When the examination starts , stress of examination can be identified from the face of students . In the age of competition, it is true that student has to perform best in examination . If we talk about Indian examinations , then stress is more because our education system pressures on students to clear exam. with in 3 hours binding in examination hall . What overall knowledge increased is not checked by this system. For reducing , stress first of changing education system of India is must .
If we can not change the system or if it is no problem in other country , then we have to know what is wrong with student ?
The following question can tell to you that your child is under depression due the stress of examination .

1. Does your child sleep perfectly in exam. days ?
2. Does your child feel tired in exam. days ?
3. Does your child feel weakness specially in exam. days ?
4. Does your child feel angry in behaviour ?
5. Does your child feel headache in exam. days ?

If answer is yes , then it means your child is under depression and as the parent , it is your first duty to reduce the stress of examination . The following tips will be helpful for you to reduce the stress .

1. It is the duty of parent to check whole year whether your child is studying . Fix the time of watching TV and Internet and computer . In window 7 , a new option can be used for fixation time after that time computer will automatically turn off. Parent can Control monitor from children's use of websites, games, or the amount of time they spend online. see video on youtube .
2. Student should do yoga and other physical exercise daily for getting freshness . It will surely help to reduce the stress .
3. Listening of good music , song is also very helpful for reducing stress.
4. It is also duty of student to prepare subject whole year and make necessary notes for preparation of examination. It will be helpful to reduce the burdon of subjects .
5. Make strict time table for remembering each and every topic relating to your exams.
6. Students should eat the best food for getting active physical and mental power .
7. Teachers can also contribute major role by changing teaching technique . It should in such a way that after attending class , all topic should totally clear to student after this he will not take stress of examination.
8. From time to time , students should read the biography of great and inspiring personalities who have done great work after studing high level . Study material , you can easily obtain from net .
9. Student can increase creativity in examination days by changing layout of study room or by study in park or your own garden or kichen garden .
10. Become positive and more positive . Try and try with hard work because , a person who try will never fail .

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How to Use Accrued Interest Formula in Google Docs ?

With this formula , you can simply Calculate the accrued interest of a security in the case of periodic payments.
The formula is given below :-

=ACCRINT(issue, first_interest, settlement, rate, par, frequency, basis)

Explanation of This formula

In this formula 7 items , you have to noted . Understand these one by one


Issue → is the issue date of the security.
First_interest → is the first interest date of the security.
Settlement → is the maturity date.
Rate → is the annual nominal rate of interest (coupon interest rate).
Par → is the par value of the security.
Frequency → is the number of interest payments per year (1, 2 or 4).
Basis → is chosen from a list of options and indicates how the year is to be calculated.
[Special Note : The basis argument specifies the number of days in the month and in the year assumed for the date calculations. You specify the basis as 0 for the US (or NASD) version of 30 days in a month and 360 days in a year; as 1 for the actual number of days in the month and year; 2 for the actual number of days in the month but 360 days in a year; 3 for the actual number of days in the month and 365 days in a year; and 4 for the European version of 30 days in a month and 360 days in a year. Thanks Stephen L. Nelson for telling about basis in Using Microsoft Excel's Accrued Interest Add-In Functions]

For Example

If you want to calculate the accrued interest on a bond that was issued on March 8, 1999, first paid interest on May 8, 1999, was purchased on June 23, 2000, pays an 10% coupon, shows a $2,000 par value, pays interest two times a year, and uses the US, or NASD, day-count-basis assumption, you use the following formula:

=ACCRINT("3/8/99","5/8/99","6/23/00",0.08,2000,2,0)

and answer will come in Google docs as shown below .

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how to Delete Accounting Entries in Tally.ERP 9

There are two way to delete accounting entries in Tally.ERP 9 . First way is very simple . Just open tally.erp 9 and then double click display and then click delete.

After this you can reach all accounts detail , select anyone whose entry , you want to delete and then in the alteration mode ,

you have to press Alt + D and after this press enter . After completing this action , you will see , there is no that account and its entry in tally.erp 9



In second way ,

you can go

gateway of tally >> display >> ledger >> select any account >> delete its all or any entry by pressing Alt + D

In second way , you will see only specific account's entries . So , it will be easy for you to delete any particular entry for transaction which you do not need .

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Comparison of Indian Vs USA Debt

India is in better position than USA in debt payment problem . Total debt of USA is $78.8 Trillion and India's debt is just 19.57 trillion rupees ( $ 0.42 trillion ) . This information is also important because Indian P.M. requested USA Govt. to give help to Indian Govt. but if we see that data , now USA is more needy than India to pay their the debts .

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What are The Pre-defined Groups in Tally.ERP 9 ?

Tally.ERP 9 provides you a list of Groups called pre-defined groups. This list is automatically made by this software . You can just display and use it but primary Group cannot be deleted, however, it can be renamed and According to company , it should not renamed . You can create any number of Primary Groups and Sub Groups which are again grouped under a Primary Group/Sub Group.

Tally provides pre-defined Groups in Tally.ERP 9, out of which 15 are Primary Groups

and 13 are Sub-Groups.
If you open balance sheet in tally.erp 9 without passing a single voucher entry , you will see only 9 primary groups in balance sheet which are capital nature and rest will be appear in profit and loss account .
You can see these pre- defined groups in tally.erp 9 here .

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Difference Between Current Account And Capital Account

1. Current account shows current year current year transactions and capital account shows both current transactions relating to businessman and initial capital of businessman.
2. According to FEMA Act 2000 , " There is no restrictions on holding or exchanging of foreign currency under Current Account . But Any foreign currency is under capital account , then it must be controlled under the regulations of RBI ."
3. In partnership , partners can make current account separately from capital account in which they can show only their salary , interest on capital and interest on drawing etc. and in capital account , they can show only their capital invested in the business of partnership.
4. USA has divided export and import transactions into 2 accounts: One is the current account and other is the capital account. The current account includes in international trade in goods and services and with earnings on investments. The capital account includes of capital transfers and the acquisition and disposal of non-produced, non-financial assets.
5. In general Current account is used for receipt and payment cash and non capital items and capital account is used for sources and utilization of capital .

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What Action have You Taken on Wi-Fi Security?

In the modern age , accounting is living on Internet technology , so from a small accountant to the big corporates accountant in India is using Internet both in home and in office .

But do you know , if you are providing it to any other relative , even family member via any other unsecured wi-fi technology ( new wireless networking technology ) either free or paid basis is not as per the terms and conditions of the Internet service provider .

If you are doing any of above activity , then you should inform your Internet service provider. If you don't send the above information , you are doing contraventions of the terms of Internet services provider and if any anti- national or any anti social activity is done through your campus , then you will be sole responsible for civil or criminal offenses .




You should also read new notification of Department of Telecommunication ( DOT )regarding wi-fi security at here .

Respected and Responsible Citizens of India ( Included Indian accounting communities ) ,

Due to recent cases of misuse unsecured wi-fi technology against the Indian security , it is your personal duty not to unauthorized use Internet from your campus .If any body is doing inform immediately to your service provider for co-operation on the issue in the interest of national security .

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How to Make Video for Students with Hearing Disabilities in Youtube?

Hallo teachers ,

To get education with the help of modern technology is right of every student ( included all type handicapped students ) . Modern technology is also taking forward steps for providing education to special students with hearing disabilities .

Note: Students are called hearing disable or hearing impaired or deaf when they are unable to detect or understand sounds.

They need special education from video which have written Transcription . When a deaf student read the text lines of educational video together with the movements in video , he can easy understand and learn all difficult concepts.

YouTube is providing automatic machine generated audio transcription and caption facility with automatic timing .If the user of you tube adds transcript file in his video , then when a viewer will see the video , he can also see the written text of video. This tutorial is most helpful for the teacher who are teaching to deaf or students with hearing disabilities .

Step 1

Go to http://www.youtube.com/and sign in by writing your username and passward and then
click my video .

Step 2

After reaching my video page , you will see my video page where you have uploaded your video . Now click on caption .

Step 3

After click you will see a new page where you have to upload your video's all audio's text file . for this on your video which is left side and write it on note pad . I have done same and click on browse and then click on transcript file radio button ( English beta new ) . After this click on the upload file and your file will add in you tube database and mixed in your video screen as text which will play with your video .

Step 4

Now when a deaf student will see , then he will take action by clicking right side end button of youtube button for turn on caption.

I have made caption of my one video "Tally.Erp 9 Help for Using Backup and Restore Tools" . Now this video can also be understood by deaf students who are learning tally.erp 9 via

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Best Answer has been chosen by the Voters of Yahoo Answer

Sometime , I would like to answer on yahoo answer which is the best forum for asking and answering the questions . The Given Question is relating to banking and many students are still confused about
Repo rate and Bank Rate . If you have doubt on this , then read the answer which is chosen 2nd time best in yahoo answer site . Read first best answer here .

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What Does Triple A (AAA) Mean in Finance ?

When a investor invests his money in debenture or bonds , then it is very necessary to check the quality of debenture or bonds which are issued from different companies . In USA , there are

many credit rating agencies like Standard & poor and others which gives rank and rating different companies bonds according to their quality . In India , Care Rating agency which is recognised from SEBI gives rate to Indian companies bonds and debentures .

Triple A ( AAA ) means best quality bonds

If any bond gets the rate of AAA , it means , the company who issues the bond is good for repayment lender's debt on time and there is no risk of bad debts . In other words many of them are govt. agencies or companies who have issued the bonds .

Rating agency can give also other rate like double A ( AA ) or single A , if they found bit higher risk and economic situation can affect finance and if bonds are not best quality or medium quality , then bonds can also get BBB to B rate .

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How to Migrate TDS Data from Tally 9 to Tally.ERP 9?

Tally.ERP 9 is the best accounting software in the market which provide you the migration facility from its old version . Like migrating other Tally 7.2 and Tally 9 data , you need to migrate TDS data from Tally 9 to your new Tally.ERP 9 . Main reason is that both tally 9 and Tally.ERP 9's structure are different . So , for including TDS files in Tally.ERP 9 , you have to migrate after this tally.erp 9 will convert it in its recording structure . Tally.ERP 9 have advance facility of recording multiple expenses' TDS deducation in Same Voucher . So , this migration is very necessary .

Steps for Migrating TDS Data from Tally 9 to Tally.ERP 9

First Step

You need not take this step , if you are both tally 9 and tally.erp 9 are using , when you open tally.erp 9 , tally automatically asks you for Rewrite of Data. Press Enter or Y to Rewrite Version. On pressing enter Application asks for the backup of data before rewrite.

Second Step

After backup of Data Application rewrites the Data (Rewriting happens in Three Phases).
Ist :- On re-writing the data application imports the Statutory Masters
2nd :- After import of Statutory Masters, application Migrates the Tally 9 data to Tally.ERP 9 data structure
3rd :-If all the above three steps are successfully complete then the application allows the user to continue (to record the transactions).

In case of any error

If Tally.ERP 9 does not complete above three face , then tally.erp 9 shows warning
Warning! Message with the information needed to correct the failed vouchers.

Third Step

Steps to Migrate Failed vouchers

First, view the Un-migrated vouchers report. To view the un-migrated vouchers in Tally.ERP 9 users can:

Gateway of Tally >> Display > Statutory Reports >> TDS Reports >> Exception Reports >> Migrate Tool >> Track Migrate Vouchers


Track Migrate Vouchers report displays Party-wise Total, Migrated and Un-migrated vouchers.
From this screen, select the party to check the reasons for non-migration and correct the vouchers to migrate.

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How to Save Money From Family Budget?

After increasing inflation in Indian market , prices of necessary goods are increasing fastly. Whole family budget is affecting from this . Lot of financial problems are facing by middle families of India . But if you start smart shopping , then you can save money from your family budget .

1. Every small businessman knows simple accounting that cost + profit = Sale price . Because he is small retailer so he purchases small stock and want to earn big profit from consumer . So his prices will be high . If you try to buy same Ration from supermarket , you can save big money . For example , you can get Sugar of Rs. 36 instead of Rs. 47 from supermarket . Difference between Rs. 47 - Rs. 36 = Rs. 11 , if you purchase 5 kg sugar , then you can save Rs. 55 .

2. Go to Bazaar and purchase Ration after searching two and more shops to check out the various discounts on offer.

3. Check Govt. list of Indian commodities from Daily News Paper or On Internet . Never to pay more to Local retailer .

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List of All Financial Formulae of Google Docs

For an accountant , to know financial formulae of Google docs and use them practically in google docs is very good for becoming expert . Google Docs help center has given already the total list of formulae in which 46 formulae are totally relating to Financial and it can be used by accountants and account managers . Now , we learn its practical use .

1. Formulas Relating to Interest

(A) Name of Formula = Accrued interest

Syntex =ACCRINT(issue, first_interest, settlement, rate, par, frequency, basis)

Calculates the accrued interest of a security in the case of periodic payments. Issue is the issue date of the security. First_interest is the first interest date of the security. Settlement is the maturity date. Rate is the annual nominal rate of interest (coupon interest rate). Par is the par value of the security. Frequency is the number of interest payments per year (1, 2 or 4). Basis is chosen from a list of options and indicates how the year is to be calculated.

(B) Accrued interest

ACCRINTM(issue, settlement, rate, par, basis)


Calculates the accrued interest of a security in the case of one-off payment at the settlement date. Issue is the issue date of the security. Settlement is the maturity date. Rate is the annual nominal rate of interest (coupon interest rate). Par is the par value of the security. Basis is chosen from a list of options and indicates how the year is to be calculated.

(C) Interest

COUPDAYBS(settlement, maturity, frequency, basis)


Returns the number of days from the first day of interest payment on a security until the settlement date. Settlement is the date of purchase of the security. Maturity is the date on which the security matures (expires). Frequency is the number of interest payments per year (1, 2 or 4). Basis is chosen from a list of options and indicates how the year is to be calculated.

( D) Interest

COUPDAYS(settlement, maturity, frequency, basis)


Returns the number of days in the current interest period in which the settlement date falls. Settlement is the date of purchase of the security. Maturity is the date on which the security matures (expires). Frequency is the number of interest payments per year (1, 2 or 4). Basis is chosen from a list of options and indicates how the year is to be calculated.

(E) Interest / settlement

COUPDAYSNC(settlement, maturity, frequency, basis)


Returns the number of days from the settlement date until the next interest date. Settlement is the date of purchase of the security. Maturity is the date on which the security matures (expires). Frequency is the number of interest payments per year (1, 2 or 4). Basis is chosen from a list of options and indicates how the year is to be calculated.

(F) First interest date

COUPNCD(settlement, maturity, frequency, basis)


Returns the date of the first interest date after the settlement date, and formats the result as a date. Settlement is the date of purchase of the security. Maturity is the date on which the security matures (expires). Frequency is the number of interest payments per year (1, 2 or 4). Basis is chosen from a list of options and indicates how the year is to be calculated.

(G) Date of interest date

COUPPCD(settlement, maturity, frequency, basis)


Returns the date of the interest date prior to the settlement date, and formats the result as a date. Settlement is the date of purchase of the security. Maturity is the date on which the security matures (expires). Frequency is the number of interest payments per year (1, 2 or 4). Basis is chosen from a list of options and indicates how the year is to be calculated.

(H)Cumulative interest payments

CUMIPMT(rate, NPER, PV, S, E, type)


Calculates the cumulative interest payments (the total interest) for an investment based on a constant interest rate. Rate is the periodic interest rate. NPER is the payment period with the total number of periods. NPER can also be a non-integer value. The rate and NPER must refer to the same unit, and thus both must be calculated annually or monthly. PV is the current value in the sequence of payments. S is the first period. E is the last period. Type is the due date of the payment at the beginning (1) or end (0) of each period.

(I) Cumulative interest with constant interest rate

CUMPRINC(rate, NPER, PV, S, E, type)


Returns the cumulative interest paid for an investment period with a constant interest rate. Rate is the periodic interest rate. NPER is the payment period with the total number of periods. NPER can also be a non-integer value. The rate and NPER must refer to the same unit, and thus both must be calculated annually or monthly. PV is the current value in the sequence of payments. S is the first period. E is the last period. Type is the due date of the payment at the beginning (1) or end (0) of each period.

(J) Effective annual interest rate

EFFECT(NOM, P)


Returns the effective annual interest rate, given the nominal annual interest rate (NOM) and the number of compounding periods (P) per year.

(K) Annual interest rate

INTRATE(settlement, maturity, investment, redemption, basis)


Calculates the annual interest rate that results when a security (or other item) is purchased at an investment value and sold at a redemption value with no interest being paid. Settlement is the date of purchase of the security. Maturity is the date on which the security is sold. Investment is the purchase price. Redemption is the selling price. Basis is chosen from a list of options and indicates how the year is to be calculated.

(L)Constant interest rate

RATE(NPER, PMT, PV, FV, type, guess)


Returns the constant interest rate per period of an annuity. NPER is the total number of periods, during which payments are made (payment period). PMT is the constant payment (annuity) paid during each period. PV is the cash value in the sequence of payments. FV (optional) is the future value, which is reached at the end of the periodic payments. Type (optional) defines whether the payment is due at the beginning (1) or the end (0) of a period. Guess (optional) determines the estimated value of the interest with iterative calculation.

2. Formulas Relating to Depreciation , Allowance and amoritization

(A) Depreciation of asset

Formula

=DB(cost, salvage, life, period, month)


Returns the depreciation of an asset for a specified period using the double-declining balance method. Cost is the initial cost of an asset. Salvage is the value of an asset at the end of the depreciation. Life defines the period over which an asset is depreciated. Period is the length of each period. The life must be entered in the same date unit as the depreciation period. Month (optional) denotes the number of months for the first year of depreciation.

(B)Depreciation

Formula

=DDB(cost, salvage, life, period, factor)


Returns the depreciation of an asset for a specified period using the arithmetic-declining method. Note that the book value will never reach zero under this calculation type. Cost fixes the initial cost of an asset. Salvage fixes the value of an asset at the end of its life. Life is the number of periods defining how long the asset is to be used. Period defines the length of the period. The period must be entered in the same time unit as the life. Factor (optional) is the factor by which depreciation decreases.

(C) Allowance

Formula

=DISC(settlement, maturity, price, redemption, basis)


Calculates the allowance (discount) of a security as a percentage. Settlement is the date of purchase of the security. Maturity is the date on which the security matures (expires). Price is the price of the security per 100 currency units of par value. Redemption is the redemption value of the security per 100 currency units of par value. Basis is chosen from a list of options and indicates how the year is to be calculated.

(d)Periodic amoritization

Formula

=IPMT(rate, period, NPER, PV, FV, type)


Calculates the periodic amortization for an investment with regular payments and a constant interest rate. Rate is the periodic interest rate. Period is the period for which the compound interest is calculated. NPER is the total number of periods during which annuity is paid. Period=NPER, if compound interest for the last period is calculated. PV is the present cash value in sequence of payments. FV (optional) is the desired value (future value) at the end of the periods. Type (optional) defines whether the payment is due at the beginning (1) or the end (0) of a period.

(E)Straight-line depreciation

Formula

=SLN(cost, salvage, life)


Returns the straight-line depreciation of an asset for one period. The amount of the depreciation is constant during the depreciation period. Cost is the initial cost of an asset. Salvage is the value of an asset at the end of the depreciation. Life is the depreciation period determining the number of periods in the depreciation of the asset.

(F) Arithmetic-declining depreciation rate

Formula

=SYD(cost, salvage, life, period)


Returns the arithmetic-declining depreciation rate. Use this function to calculate the depreciation amount for one period of the total depreciation span of an object. Arithmetic declining depreciation reduces the depreciation amount from period to period by a fixed sum. Cost is the initial cost of an asset. Salvage is the value of an asset after depreciation. Life is the period fixing the time span over which an asset is depreciated. Period defines the period for which the depreciation is to be calculated.

3. Formulas Relating to Capital Budgeting and Investment Decisions

(A) Internal Rate of Return

Formula

=IRR(values, guess)


Calculates the internal rate of return for an investment. The values represent cash flow values at regular intervals, at least one value must be negative (payments), and at least one value must be positive (income). Values is an array containing the values. Guess (optional) is the estimated value. If you can provide only a few values, you should provide an initial guess to enable the iteration.

(B) Modified internal rate of return

Formula

=MIRR(values, investment, reinvest_rate)


Calculates the modified internal rate of return of a series of investments. Values corresponds to the array or the cell reference for cells whose content corresponds to the payments. Investment is the rate of interest of the investments (the negative values of the array) Reinvest_rate is the rate of interest of the reinvestment (the positive values of the array).

(C) Number of periods for an investment

Formula

=NPER(rate, PMT, PV, FV, type)


Returns the number of periods for an investment based on periodic, constant payments and a constant interest rate. Rate is the periodic interest rate. PMT is the constant annuity paid in each period. PV is the present value (cash value) in a sequence of payments. FV (optional) is the future value, which is reached at the end of the last period. Type (optional) defines whether the payment is due at the beginning (1) or the end (0) of a period.

(D) Net present value

Formula

=NPV(Rate, value_1, value_2, ... value_30)


Returns the net present value of an investment based on a series of periodic cash flows and a discount rate. Rate is the discount rate for a period. Value_1, value_2,... value_30 are values representing deposits or withdrawals.

(E) Periodic payment

Formula

=PMT(rate, NPER, PV, FV, type)


Returns the periodic payment for an annuity with constant interest rates. Rate is the periodic interest rate. NPER is the number of periods in which annuity is paid. PV is the present value (cash value) in a sequence of payments. FV (optional) is the desired value (future value) to be reached at the end of the periodic payments. Type (optional) defines whether the payment is due at the beginning (1) or the end (0) of a period.

(F ) Payment on principal

Formula

=PPMT(rate, period, NPER, PV, FV, type)


Returns for a given period the payment on the principal for an investment that is based on periodic and constant payments and a constant interest rate. Rate is the periodic interest rate. Period is the amortization period. NPER is the total number of periods during which annuity is paid. PV is the present value in the sequence of payments. FV (optional) is the desired (future) value. Type (optional) defines whether the payment is due at the beginning (1) or the end (0) of a period.

(G ) Capital value

Formula

=XNPV(rate, values, dates)


Calculates the capital value (net present value) for a list of payments which take place on different dates. The calculation is based on a 365 days per year basis, ignoring leap years. If the payments take place at regular intervals, use the NPV function. Rate is the internal rate of return for the payments. Values and dates are a series of payments and the series of associated date values entered as cell references.

4. Other Financial Formulas

(A )Treasury bill price

Formula

TBILLPRICE(settlement, maturity, discount)


Calculates the price of a treasury bill per 100 currency units. Settlement is the date of purchase of the security. Maturity is the date on which the security matures (expires). Discount is the percentage discount upon acquisition of the security.

(B)Price per 100 currency units

Formula

=PRICEMAT(settlement, maturity, issue, rate, yield, basis)


Calculates the price per 100 currency units of par value of a security, that pays interest on the maturity date. Settlement is the date of purchase of the security. Maturity is the date on which the security matures (expires). Issue is the date of issue of the security. Rate is the interest rate of the security on the issue date. Yield is the annual yield of the security. Basis is chosen from a list of options and indicates how the year is to be calculated.

(C) Annual yield

Formula

=YIELDDISC(settlement, maturity, price, redemption, basis)


Calculates the annual yield of a non-interest-bearing security. Settlement is the date of purchase of the security. Maturity is the date on which the security matures (expires). Price is the price (purchase price) of the security per 100 currency units of par value. Redemption is the redemption value per 100 currency units of par value. Basis is chosen from a list of options and indicates how the year is to be calculated.

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Take Inspiration From Handicapped Accounting Scholars

I have seen two video  in youtube in which  I saw that two great Accounting scholars have cleared their Accounting degree in the form of  Bachelor of Commerce and C.A. . Both are physically Handicapped but after this they have succeeded in accounting career  .

First Handicapped Accounting Scholar

It is Nick . He  has no limbs and no arms . He is  now twenty-three years old and has completed a Bachelor of Commerce majoring in Financial Planning and Accounting. He is  also a motivational speaker and love to go out and share his story and testimony wherever opportunities become available. He has developed talks to relate to and encourage students through topics that challenge today's teenagers. He is  also a speaker in the corporate sector. He is spending his happy life with his family in Melbourne Australia .



you can also see his motivated video



Second Handicapped Accounting Scholar

She is Rajani Gopal . She is blind . Without her eyes , she has done Chartered Accountancy Course from ICAI . Now she is practising in his CA firm .



you can also see her motivated video 



Our young handicapped  and physically challenged students should take inspiration from these two Accounting Scholars and work hard for making their accounting career .

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Explanation of Simple two Way to Record Branch Accounts in India

After Globalization , India becomes market place for world . Top class companies are starting their business in India . So , I am giving explanation to fresh  professional accountants how they can record branch accounts in India .

There are two way , you can choose any one of following for keeping record according to the need of your company.

First Way


Open independent branch


It is dependent on your company's business size , if it is so large , then create your branch in company creation by giving the name of company as branch of main company and after this create ledger without writing balance so it will deem zero balance in accounts . After this pass the regular voucher entries .


Second Way

All branches record in Head Office's Tally.ERP 9


If want to record all the transaction of branches in head office . Then you can create cost centers and cost categories .

To create a Cost Category, set Maintain Cost Centres to Yes in F11: Accounting Features and then set More than ONE Payroll/Cost Category to Yes.

Gateway of Tally> Accounts Info.> Cost Centres> Create (under Multiple Cost Centres)

 You can also create sub - branches by keeping one branch under parent branch in multiple cost centres .  Suppose , If you want to create cost center  of  Taxation ,  finance and marketing  sub branches  , under Delhi branch , then in the creation mode of multiple cost center , choose category Delhi and , then create cost center taxation , finance and marketing , if you have not create cost center already , then create same box by Alt + C .

After this when you pass any voucher entry , you have to record the detail your branches also , suppose you have paid lighting bill , then new pop up window in voucher entry of payment , you have to write the detail of branches' lighting expenses . After this you can find the detail report of everything above revenue and expenses from any particular branch .

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Why does Tally.ERP 9 Ask " Overwrite Tally Back."?

Query : I use tally.ERP 9 register version. I take regular back up in my pen drive. when i take back up tally ask me ' overwrite tally back?. what does it means and why does it ask ?


Reply : If you save you data in the folder in pen drive which have already some data , then tally will not enable to save or back up in that folder in pen drive and ask "overwrite tally backup"
Same situation will happen when you restore the file in the folder where is some other file existed . So please use blank folder for backup or restore otherwise tally delete previous data by overwriting in same folder .
If you have downloaded free Tally.ERP 9 Reference manual and read it deeply , then you will find at the chapter of Restoring Backup, Tally solution company suggest following for smooth restoring backup.

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Get Education of Business Environment at MBA Shiksha Blog

We are happy to announce accounting education users and subscribers who are studying in MBA in India that last week, we launched MBA Shiksha blog for covering Business Environment Topics especially for

 Indian MBA students. Like accounting, business environment is tough subject for MBA students. Till today, we have written 3 topics.

1. Social Environment and Its Main Elements

2. Social Responsibility of Business and Points in Favour and Against of it

3. What is Technological Environment and Its Status in India ?

I hope, you will also touch MBA Shiksha for better preparation of Business Environment Subject.

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How to Create and Use of Scenario in Tally.ERP 9 ?

Scenario  analysis is a complex business process related to futures studies. So , We can create and Use of Scenario in Tally.ERP 9 . First of all , we learn steps for creating scenario in Tally.ERP .

For Creating Scenario , you have to write yes the option of  " Use Reversing Journals & Optional Vouchers " in accounting feature of Tally.ERP 9.
 After this you will see a new button in Account info. with the name of Scenario .

Gate way of Tally >> Account Info. >> Scenarios

Click Scenarios and  then click on create . After this you will see the form of scenarios creation . Give a suitable name to the scenario. In this case, it is Provisional , write provisional and then Set Include Actuals to Yes . Then accept this Scenario creation form .

Now after creating Scenarios we will learn its use :-

Pass the Voucher entry of Transferring Depreciation to Provision for Depreciation account in Reversing Journal

Steps

Gateway of Tally >> Accounting Voucher >> Click Right side button  F 10 Rev Jrnl

In reversing journal  create ledger of Depreciation ( Under indirect expenses )  by Alt + C  and Debit with amount 20000

and then create Provision for depreciation account  ( Under provison ) by Alt + C and credit with 20000

After this accept it and then see its in Exceptional Report

Go to Gateway of Tally > Display > Exception Reports > Reversing Journals

You can use scenarios in statements that have the New Column button active . When you click Display the Balance Sheet and Select New Column. In the column details, tab down to Types of Values to Show. Select the scenario named Provisional. After this balance sheet will show actual and provisional report .

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Solution of Problem Relating Implementing A Balanced Scorecard

Today ( 6 /11/2009 ) , I found  the email from one student who want to take my help to solve 6 questions relating to cost accounting . 
He sent me Pdf  file of  all accounting problems .  After downloading the pdf

  file , I have read his questions . Now , I have taken his first question's first first sub-question. Actually , this is relating to strategic management  but because cost accounting and finance also helpful for  making effective strategy , then , I thing it has include. Read it first this question

In this question , The Rev . Paul Harison is a social worker but  he need accounting expert who can tell him how to  effective utilize the shelter and its space at the lowest  cost .  From some resource he has listened about the balanced scorecard . Now , he is interested to know its estimated cost and benefits , if he implementing a balanced scorecard .

Dear , first of all , I am telling briefly about balanced scorecard . The balanced scorecard  is a strategic  management  technique for effective utilization resources in the field of finance , education and marketing  and NGO works .

Suppose , If you have to implement the balanced scorecard  in the field of  finance , you need the services of finance specialist who will find following and analysis . So , cost is only the service charges of finance specialist .

1. Return On Investment

2. Cash Flow

3. Return on Capital Employed

4. Financial Results (Quarterly/Yearly)

 

If it is implemented in above case , then

 

Cost will be only the organisation from which you have taken the services , that organisation will all charge him on the basis of no. of team members and time of team activities and other software cost .

 

Benefit  will be in the form of effective utilization of resources , increase the amount of donation .

I think , second part of question can tell the specialize person from whom you will  contact for implementing balanced scorecard tool .

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How to teach the concept of Debtors, Bad Debt and Provision for Doubtful Debt ?

Teaching of accounting is not easy, every student is challenge for accounting teacher and many concepts are very difficult to make understand to students. One of those is to teach concept of debtor, bad debt and
 provision for doubtful debt.


First of all to introduce students about debtor

Who is debtor?

Debtors are customer of any business organization. They purchase goods from businessman. But all customers are not debtor because if customer gets goods after prompt payment, then he will not become debtor.

So, Relation between businessman and debtor

Businessman has to take the money of goods sold. So, it is his duty to record what amount he has to take from debtor because different debtors take different goods in different quantity at different dates. Every time when a debtor purchases goods from businessman, record of each credit sale will be done by accountant.

After this, your student will realize that why debtors are are so important in business and in accounting. They will understand that businessman will sell more on credit, then more debtors will become and more entries of these transaction will be done in business books .

Bad Debts

Every debtor is not honest and it may possible that some of amount may loss due to not paying by debtor of business. Ram has taken goods from X company of $ 50000 but he does not pay $ 10000 and all other amount he paid, so this amount will become Bad Debt and it is the loss of business. Total value of debtor will decrease with the amount of bad debts.

Because we pass the entry bad debts account debit and debtor account credit , so there is no need to deduct extra but if businessman realize in the end after closing the accounts of his books , then we have to deduct this amount in balance sheet .

Provision for Doubtful Debt

Many accounting teachers have failed to clear the concept of provision for doubtful debt. If accounting teacher will use my technique, then they will easily teach better.

Sham is a businessman. He is very sad because he has invested $ 100 in his business and he purchased goods $ 60 and sells it to his debtor at $ 100. But he receives only $ 10. Now this amount is less than the cost of good purchase, his tension is how will he purchase same $60 goods, he has only $ 10. One of his friend suggest him sell other assets and purchase the goods . He sells his other asset $ 40 at $ 30 on credit and gets loss of $ 10 and gets only $ 20 dollar and he again purchases goods of $ 30 and sells but he got nothing . What will happen , business will close . He has no money . Now one intelligent friend suggest to businessman to reserve his cash . It must be some receivable amount as doubtful debts . What is benefit of it . If some debtor will not pay , you will purchase goods from your working capital and there is no need to sell fixed asset . So , this amount will be called provision for doubt full debts .

Suppose in above example Sham reserves 10 to 20% of his debtor as estimated loss , then he can use this amount for purchasing raw material . After this there is no need to sell the $ 40 other asset.

After this teacher's duty is to explain the benefits of provision for doubtful debt


• Provision for doubtful debt is helpful to purchase goods in case bad debts will happen in reality.

• Provision for doubtful debt is helpful to effective use of working capital.

• Provision for doubtful debt is helpful to secure the business.

Now, explain how to treat , it . Learn here .

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