Profit and Loss Appropriation Account and Its proforma

Profit and Loss Appropriation account is the part of financial statements of company. It is different from profit and loss appropriation account of partnership firm . When a company makes his profit and loss account, its net profit is transferred to the credit side of profit and loss appropriation account. Profit and loss account shows only the net profit or net loss from operation of business but profit and loss appropriation accounts shows all non- operational adjustment which is needed for proper distribution of net profit between shareholders and company for future growth.

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Who are the Shareholders of a Company?

Shareholders or stockholders are the persons or firm or companies who purchase the shares of other company. They are the real owner of company. Shareholders may be preference shareholders or equity shareholders.

Equity shareholders can vote in annual general meeting for passing any resolution. Other side Preference shareholders have preference to get dividend with fixed rate before giving dividend to equity shareholders. All shareholders have to open demat account if they want to deal in shares. We have already told you that shareholders are the real owner of company, it means if company suffers loss then shareholders have no right to get dividend. If company is liquidated, then they can receive their money only after paying external creditors and debenture holders.

Company has to maintain good relation with shareholders and try hard to bring high rate on capital which is given in the form of shares because every shareholder wants to increase his share capital.

Shareholders have to maintain their contact with different company because they are interested to invest their hard earned money in that place from where they can get high ROI. They have to check the past records from company’s financial statements before investing their money. If any company wants to encourage shareholders, then it has to maintain fair and reliable financial statements and show evidence of its best performance with financial statements.

Rights of Shareholders

1. To transfer the shares

2. To get information of meeting of company, take part in it and Vote.

3. To check the registers and copies of receipts and take copies.

4. To take the copies of memorandum of association and article of association.

5. To receive right shares.

6. To obtain annual reports, auditor’s report, profit and loss account and balance sheet’s copies.

7. To sign the proposal of liquidation which is done by Court.

8. To take part in the committee for appointment of liquidator at the time of voluntary liquidation of company.

Shareholders Vs Members

All registered shareholders are members of company but all registered members may not be shareholders because some companies establish without share capital.

Shareholders Vs Brokers

All shareholders may not be brokers but all brokers may be shareholders because brokers have right to deal in share market. If they purchase the shares on the behalf of their customers, they are only brokers not shareholders of company. But due to representing shareholders in share market, they can use some powers of shareholders while they deal.

Shareholders Vs Stockholders

If shareholders purchase shares in sets form, then they are said stockholders.

Shareholders Vs Stakeholders

Shareholders may be stakeholders, but stakeholders may be shareholders or may not. Stakeholders are the persons who are affected by that company's operations - including its shareholders, but also its bondholders, managers, workers, retired workers, suppliers, customers, and the communities where it operates.

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Why are Companies so Important from Accounting Point of View?

Today, I have started to write knol a project of Google for those who want to share knowledge, if some one is expert in that knowledge. I have taken the topic “Why are companies so important from accounting point of view?”

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What is Company? What are its Features?

Introduction

In corporate accounting , commerce students have to learn accounting treatment of issue of share capital , debenture and its redemption , bonus and right issue at graduation level . They also have to solve the problems of final accounts of different companies . For proper accounting treatment , learning of Indian Company Law 1956 is must . So , this topic is being discussed here. If you are starting to learn Company or Corporate Accounting , then this article will be useful for you because after reading this article , you will understand , the brief history , meaning , definition of Company and its six features .

History

First of All, in France this word was used for body of soldiers see [Fr. Term Compaignie].. After year 1500, this word became famous in business. Group of businessmen was called company.

Example

I can explain the meaning of company with a simple example. Suppose, two persons want to do business at large scale but they have limited money. They are also not interested to make partnership due to its unlimited liability. They go to the office of registrar of companies and fill the form of creation of company and attaching required documents. They also pay the required fees. After this, registrar will register their company. This registered company will be independent Identity.

Definition of Company

Indian Company law 1956’s section 3(1) (i) define company, “Company is the organisation which is formed and registered under this law or any previous law”

Explanation of Company

From above example and definition, we can understand that company is voluntary and autonomous association of persons. This is made for achieving business objectives. It acts like human being. Company can purchase assets or sell it. It can take also debt. It can open bank account. It is fully free from its members. Company is operated through board of directors.

Company vs. Corporation

There is no solid difference between Company and Corporation. But , these days Corporation word is mostly used in finance area because this word is most popular in USA economy . Media is also publishing all stories of Industries by using Corporation as keyword in India. All features of Company like a separate legal entity having its own rights, own property , sign binding contracts , privileges, and liabilities distinct from those of its members can be seen in Corporation .

Features of Company:-

1. Separate legal entity

It is the feature of company that company is not just association of persons but it has separate legal entity. It is an artificial person in the eye of law. Its asset is not the asset of shareholder. It can contract with members. This feature was firstly accepted in Salomon vs Salomon and Company ltd. Salomon was the dealer and manufacturer of leather boot and shoe. He had a wife, a daughter and other five sons. He sold his business to Salomon and company ltd which he made himself he also made his family as its shareholder. His wife, daughter and his other four sons purchased one share of this company and rest, he purchased. He purchased £ 20000 shares and £ 10000 shares. After one, due to economic trouble and other reasons business failed and the company was put into liquidation. At that time financial position of company was
Assets £6000
Debentures £10000
Unsecured Creditors £ 7000
External creditors demanded their money because Solomon and Solomon Company were both one person and this business was of Solomon and it was being operated by him. It was a fraud. But
The House held:
"Either the limited company was a legal entity or it was not. If it were, the business belonged to it and not to Mr. Salomon. If it was not, there was no person and no thing to be an agent [of] at all; and it is impossible to say at the same time that there is a company and there is not."
The House further noted:
"The company is at law a different person altogether from the [shareholders] ...; and, though it may be that after incorporation the business is precisely the same as it was before, and the same persons are managers, and the same hands received the profits, the company is not in law the agent of the [shareholders] or trustee for them. Nor are the [shareholders], as members, liable in any shape or form, except to the extent and in the manner provided for by the Act."
In end court decided that Solomon and company are different from Solomon and Solomon is secured creditor. So his given loan should be returned first.

2. Separate Property

It is also feature of company that property of company is different from its members. It can purchase or sell property without the permission of shareholders. In other words, assets of company are not the assets of members like partnership.

3. Limited Liability

Limited liability is also another important feature of company. It is the reason that large number of investors invest in limited liability companies. It is the liability of company to repay not the liability of its members. Members’ liability is only limited up to the purchased value of shares. They have to pay balance amount of their shares.

4. Perpetual Succession

The life of company is very stable that human being’s life. There is no effect of changing, death, insolvency of respected member on company. Its existence is not affected by members’ existence. Shares can easily transfer from one member to another member, so liquidation of company is only possible by law.

5. Common Seal

Company can not sign on any contract because it is artificial person and it works with common seal. Every document of contract with company is only valid, if there is common seal of company on it.

6 Right to Sue

Company can sue on other parties like natural person for protecting its assets and properties. Other persons can also charge on the company.

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Collaboration Microsoft Office Document with Google Docs

Google is purchasing Docverse for about $ 25 million. After this user of Microsoft office document can easily collaborate their document with google docs. It will another purchase after purchasing of Appject.
DocVerse officially launched on Oct. 28 to serve the 600 million Office users looking for a better way to edit and share Microsoft documents. DocVerse is a plug-in for Microsoft Office that turns the suite of productivity applications into web-enabled collaboration tools and allows real-time sharing and simultaneous group editing of documents.



After acquiring Docverse Google Docs will become sole programme which have largest quality of online documentation.

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Share Your Information with Many developers by Integrating Java with Tally.ERP

Now you can integrate your java/ j2ee application with tally and share your information with many developers.

Kumar Gaurav Srivastava says in his new made blog “Java Help”

“Hello while I was integrating my java/j2ee application with tally I taught of sharing my information with many developers who may get help in integrating their applications with Tally (which is widely used for accounting in India)” link

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CA Students Training in Abroad - Now Announcement of ICAI

ICAI president Uttam Prakash Agarwal has announced, CA students can now get training from

Indian CA firm practicing outside India.

ICAI Enters Bilateral Program of Other country’s Certified Accounting Institute

Agarwal said, “ICAI has also signed MoU with the Institute of Chartered Accountants in Australia to expand the Indian CAs horizon and boost Indian accountancy profession globally. A joint declaration was also signed with the Certified General Accountants Association of Canada to augment and strengthen bilateral co-operation. A joint declaration was also signed with Bahrain.”

ICAI won’t say how much CA students would have to receive stipend in order to work in outside CA firm.

ICAI has created a section in Singapore and the process of formation of Ireland and Thailand chapters of ICAI is in advanced stage. This professional body has also proposed to set up sections in Switzerland, South Africa and New Zealand. The Financial Express has more details on this story.

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How to Use Calculator in Tally.ERP 9

In below of tally.erp 9, you will discover task bar which has the logo of tally Solution Company and Calculator facility. This calculator is advance from general computer calculator because with this is advance calculator like google calculator , you can not only calculate the required number after different mathematical calculations like addition, subtraction, multiplication and divide but also you can transfer this calculated amount to voucher entry’s amount column.

System of using calculator is very simple. Just go to tally.erp 9’s gateway. After making required ledger accounts , click accounting voucher for passing voucher entries and then pass the voucher entries when , you will reach to amount column where you have to write amount of entry . At that point you have to press tally short cut key Alt + C and you will reach automatically to Calculator. In this calculator, you can add, subtract, multiply and divide the numbers and for multiplying, you have to use sign of star [*] between two numbers and sign of divide [/].

For example

2000*20 = 40000

2000/20=100

After getting result in calculator, again press enter and you will see that result from calculator

will go to Amount column of tally.erp 9.

Important Points to remember

Ø Press Alt + C from Amount column for going to Calculator of Tally.erp 9.

Ø Press enter after calculation from calculator .

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What is Dividend?

When an investor invests his money in shares, it will be the source of the company who issued the shares. That company gives some part of profit to all shareholders or investors who invested their money in company’s shares. Part of company’s profit which is given to shareholder is called dividend. Except cumulative pref. shares, company will not give dividend to equity and pref. shareholders, if company has not earned profit.

Dividend is reward of sacrificing the money which is paid by shareholders in the form of shares. Shareholders have right to get dividend but they can not fix the amount of dividend because there are many factors which affects the rate of dividend. Sometime company may interested for ploughing back of profit, at that time shareholders can not demand for dividend.


If dividend is fixed, then it is the responsibility of accountant to show it in profit and loss appropriation account. This account is opened after making the profit and loss account for giving dividend and other adjustments. Accountant will pass the following adjustment entries.

Because, proposed dividend is not given so, it is liability of company to pay. So, its account will be credited and it will go to balance sheet of company. If company declares and paid dividend in the end of year, then following entry will be passed.

At this time dividend account will be closed after transfer to profit and loss appropriation account and payment amount will be deducted from bank account in balance sheet.


FAQ relating to dividend


Q: - 1 Is it possible, company has earned profit but board of directors did not declare dividend?

Ans: Yes, it is possible that company has earned the profit and its board of directors did not declare dividend because, board of directors think that if company will issue the dividend, it will disturb the financial position. At that time, they understand what is the better and they decide not to declare dividend.

Q:-2 In Which proportion is dividend given?

Ans. Dividend is given in the proportion of paid up capital

For example, suppose, paid up capital is $ 100000 and rate of dividend is 15%, then value of dividend

15/100 X 100000 = 15000

Q: - 3 What is simplest definition of Dividend?

Ans. Corporate earning and profits not retained in the business and when distributed among shareholder are known as dividend.

Q: - 4. Is dividend given on calls in advance?

Ans. No, because shareholders are given interest on calls in advance and this amount is just loan to company before the date, when amount of call is payable by shareholder .For that time calls in advance will be adjusted with payable amount of calls. From that date it will be included in paid up capital.

Q: - 5 Is dividend given on Call in Arrears?

Ans. No, because it is not the part of paid up capital. It means that it is which company has demanded but not received. So, it is like debt to shareholder and company has right to get 5% annual interest on this amount from shareholder.

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A Call to Accounting Students and Graduates

I know that many of you have either been an accounting student, or are currently enrolled on an accounting course or degree . Tell me, what would you change about your education? Complete the following statement in a comment and I’ll publish your thoughts in a follow-up post, linking to your website:

If I ran a design course…

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Pronouns Are Fun Too - Also in Accounting Education

In any written work , proper use of language is must . Noun, pronouns, adjectives , verbs and adverbs are the basic parts of any language. But blogging is exception of these strict rules.Like writing of poems and songs needs not to use grammar rules , blogging is also creative area in which blogger writes his thoughts without applying strict rules of language .Accounting Education is also blog and all its posts are my own thoughts which I shares with you with my creative way.

It may possible , you would see some pronouns mistakes in this blog due to my creativity or mistake . If you see any spelling mistake or grammar mistake in any tutorial or article .Please tell me its url or website address at vinod@svtuition.org . If it is due to mistake , I will surely edited that page for correcting .


If I broke any grammar rule of English language due to my creativity ,then sorry to me for not changing . Just read, enjoy the post as accounting poem and forget. Not only me many other blogger like Blogging Tips's writer Written by Patricia Vennes from Writer's Rants has written same in " Pronouns Are Fun Too "

Most of us already know how to use pronouns and don’t have any problems writing
other than the occasional spelling mistake or the lack of creative words, but
some people have a difficult time. Grammar is not very interesting, yes I
understand that, but it is what I was hired to write about so bear with me and
the dry lesson. I’ll try to spice it up with interesting examples. Link

Toni McNulty says in Comment

I like this post, and applaud you for educating bloggers on proper grammar. I especially like the “scull on fire” example!
It looks as if you dashed this one off in a bit of a hurry, though, and didn’t give it a good proofreading.
In your first paragraph, the proper word should be “bear,” not bare. To “bare” with you implies that you may not be dressed for winter weather.
“We are going get Botox…” How about “going TO get.”
…”preforming laser hair removal.” You see that one, don’t you … “performing.”
“…you, you, your, yours…” And the answer is: too many “you”s.
I can’t help it. My eyes just see errors like these on websites and blogs a lot, and this time I decided to respond to it.

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Make the List of All Coworkers via Your Google Profile

Suppose , If you are accountant in MNC which have large number of branches in different cities and if you want to make the list of all other accountants contacts who are working in other branches , then it is very necessary , you should create a list of all coworkers ( other accountants) .
There are many ways to create the list.

• Know the contacts and create coworkers contact list in computer excel sheet .
• Import it in Google Contact beta .
• Add contact one by one in gmail account .

But from all above methods creating contact list by editing the Google profile is best .

For this go to edit profile >> Contact info >> Create Coworkers group >> write Email Address >> Add >> Done



It will automatically add in your Google Contacts Beta and If you want to send email , you have to select the coworkers and then click email button.



Even Coworkers' profile will show in Google search result . You will see it on their results page when they do web searches for your name.

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Manage Debtors and Creditors E-mail Addresses in Google Contacts Beta - 6 Tips

Earlier , I have given the tips in which I have written about the technique for tracking work in one place by accounts manager . Account manager keeps also all contacts with supplier and customers in GMail or his company email address . But now he can increase his productivity with fast and interesting Google Contact tool .

Google has launched Google contacts beta which can be signed in with Gmail user name and password. If you have large number of sundry debtors and creditors emails and you want to communicate them without any delay with Gmail account. The following tips are very useful for you to use Google Contact with Gmail account.

1. Creating contacts of Debtors and Creditors: -

When you sign Google Contacts, you will see your all above right side two buttons with plus sign. Click first group button and then add debtor list. And OK. Again create creditor list from group creation button. You will see sundry debtors and creditors list in my contacts. Now Select Debtor list from group and add full contact by click first plus button from above right side.



2. Editing of Contacts of Debtors and Creditors :-

For this just select any contact and click the button of edit for editing.



3. Merge All duplicate Contacts of Debtors and Creditors with Single button :-
Some time when, import and also write new debtors and creditors contacts in Google It may possible that some duplicate contacts are created by you. This is the challenge for you to make the list of debtors and creditors contract without duplicate contacts. Google had given the system to merge contact one by one system in February 11, 2009’s post “Four Changes in Gmail Contracts " . But it is happy news for you that you can merge all your duplicates contact of debtors and creditors with a single button. See how in following picture.



4. Import & Export Your All Contract:-

In the right side of google contact, you can see import and export button and with this you can import or export 3,000 contacts at a time. Non-ASCII or non-Latin characters may not be accepted. Any information formatted as a group or distribution list won't transfer into your Gmail Contacts list. Importing information that matches the email address of an existing entry will replace the information in your Contacts list with the most recently uploaded information.



5. Save Time for Writing Full Contact

If you've been considering getting all your contacts into Gmail or syncing your Gmail contacts to your phone, now's the time to do it. As Gmail blog've written about previously, you can sync your contacts to a wide variety of devices (including Android, iPhone, Blackberry, SyncML, etc). So if you were dreading spending hours getting your contacts in order, now you can do it with a couple clicks.

6. Creating or editing CSV files

Spreadsheet programs like Microsoft Excel make it easy to create and edit CSV files. Your CSV file should be formatted as a table and must include a header, or first line, that defines the fields in your table. Gmail accepts many common header fields (name, email address, etc.) (In case import of contacts).Link

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New York Times Accounting Guide - Rules For Maintaining the Accounts of Banks

The New York Times has written more flexible Accounting rules for banks and maintaining their accounts :

1. Now, Banks can adjustments in their capital for helping investor to check current market value of bank loan and other fixed assets of bank .
2. GAAP will not barrier for maintaining accounts . Board of directors can use their personal judgement relating to accounting decisions .
3. Banks have power to degrade the financial information .
4. In so many words, Herz is addressing the fact that regulators need to utilize different accounting rules than those currently in place in order to protect investors Link
5. unrealized losses should be recognized on bank balance sheets but not to be reflected on income statements.Link

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Svtuition in Research – The New York Times

By BENEDICT CAREY - Health & Teaching Research — Many 4-year-olds cannot count up to their own age when they arrive at preschool, and those at the Stanley M. Makowski Early Childhood Center are hardly prodigies. Most live in this city’s poorer districts and begin their academic life well behind the curve. Link

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Pay-back Period Method of Capital Budgeting - Simplest Technique of APC

Yesterday, I saw the paper of MBA and found the question “What is pay-back period method of appraising capital expenditure projects? What are its merits and demerits? This question is taken from the methods of capital budgeting one of chapter of Management Accounting . Pay-back period method is the traditional method of capital budgeting.

Meaning of Pay-back period

Pay-back period is the period in which investors obtains his amount of investment in fixed asset. Suppose, you have purchased the fixed asset of Rs. 100000 and after operating this fixed assets in business and earned Rs. 100000 in three years. Therefore 3 years are the pay-back period of investment in fixed asset. This period can also estimate on the basis of previous experience with same project.

Pay-back Period Method

After knowing what pay-back period is, it is easy to understand pay-back period method. It is the method in which we calculate pay-back period of different projects in which investor can invest his money. After this, investor compares length of period. Investor will accept only that project for the purpose of investment whose pay-back period is least out of different alternatives of projects. Other projects will be rejected.
If there is only one project in which investor wants to invest. At that juncture, investor will accept the project if its pay-back period will be less than standard pay-back period which is made by the management of investor or company.
Steps to Calculate Pay-back period

Ist Step

Calculate Net profit before depreciation and after tax. It is annual cash flows.

2nd Step

Calculate Pay-back period

(A) When annual profits on investment before depreciation and after tax are equal

(B) If Annual cash inflow is not equal, then add these till it equal to cost of project. After this, count this period.

Example

A project costs Rs. 100000 and yields annual cash inflow of Rs. 20000 for eight years. Calculate its pay back period.
In this case we will choose (A) from second step because annual profit on the project is equal

Practical Use of this method in appraising capital expenditure projects
Suppose, an investor has looked a machine in two company which can do same work. Its cost is also same of Rs. 20000. Now investor has to decide which machine, he has to purchase on the basis of given A machine and B machine.

The following information is given by machine providers. Net profit before depreciation and after tax from machines

Pay-back period of machine A is 5 years

Because if we add the profit from machine a , it will be equal to Rs. 20000 which is cost of machine

First year profit 1000 + second year profit 2000 + third years profit 4000 + fourth year profit 5000 + fifth year profit 8000 = Rs. 20000

In machine B, the payback period is 4 year because cost of machine can obtain from its profit with in 4 years [* for calculating payback period part (B) of Step 2 will apply]
Hence, investor should purchase B machine because according to pay-back period, it will return the expenditure of machine purchasing before Machine A.
Special Tips for Calculating Pay-back period ·

If in practical question , rate of depreciation and tax are given , then annual profit will be adjusted from them

Annual profit or annual cash flow

= Annual net profit + Depreciation – Tax

· If adding the total of annual profits are not equal to cost of project , then following formula can be used

Merits of Pay- back Period Method

1. This method is easy to understand.
2. A small investor can calculate this period himself and save money which he has to give to financial analyst.
3. In this method, investor can save from obsolescence . Obsolescence is loss due to changing in technology. Because, Investor will prefer that fixed asset which return his investment cost within shortest time.

Demerits of Pay-back Period Method

1. In the beginning of any fixed asset, it may possible that fixed asset will not give higher profit but after some times, it will start higher profit. So, this method is not proper evaluation of profitability from different assets.

2. This method ignores the time value of money. It means the value of One rupees which we have earned today is more than which we will earn after one year. Suppose two projects have same payback period which is 5 year but first project is giving profit by increasing its amount Rs. 1000 , 2000 , 3000 , 4000 , 5000 and other project is giving profit by decreasing its amount Rs. 5000 , 4000 , 3000 , 2000 , 1000 . According to payback period, both project are good but in reality B project is better than A because, it is giving higher profit in first and second year.

3. Cost of capital is also ignoring in this method. Suppose, if we purchased asset on loan, then we also check what is rate of loan and compare it with profitability of asset.

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100 Things I've learned from Accounting Education

First time, I have taken admission in 1996 in 10+1 commerce. In this class, I learnt basic things of accounting subject which I had used in my post graduation in commerce. I am learning and working in this field more than 12 years. Because, Accounting is my favorite subject in commerce and therefore I have selected this field for my career. I have learnt many things from this education which I am telling you in “100 things I’ve learnt from accounting education”.

1. With accounting education, first of all, I started to maintain my personal income and expenditure accounts.
2. To calculate after each task due to this education and it had helped me to reduce my personal expenses.
3. With this education, I also enlightened how to measure the efficiency of a company.
4. I can discover where accountants can commit fraud.
5. How to use mathematics in business effectively?
6. In college time, when balance sheet was not tally, then after try, I would find how to tally it. With this mental exercise, I felt accounting nice and same time I had spent good time.
7. Rectification of errors.
8. To reduce the cost.
9. To comments on financial reports.
10. To audit the accounts. Once, I was learning practical system of auditing under CA for learning auditing. I went to audit the accounts of a reputed public school and searched 10 accounting mistakes of school accountant relating to journal entries and depositing employee’s provident fund to govt. account. After I asked about these mistakes and accountant accepted his mistakes.
11. To face difficulties.
12. Not to do wrong things and believe in god and fear from him that he is the big accountant and 24 hours, he is tracking me for keeping my proper accounts. We can not escape from his accounting treatment.
13. To make good plan.
14. To evaluate work periodically.
15. To understand responsibility.
16. While, I am making accounts, I seem that I am doing very important work of world.
17. Be quiet.
18. To think deeply.
19. In accounting, one rupee’s mistake is considered equally to one crore rupees. I do not believe in a concept which is objectively false.
20. Read more than one book.
21. All those problems which could not solve in accounting, try to resolve by practical in real life.
22. To measure the quantity, price and value of different products of different companies.
23. Nature of accounts
24. Features of accounts
25. Concentration
26. To check the financial statements before giving donation to any NGO.
27. I have learnt why, how and how to.
28. Ways to succeed in life.
29. To teach the subject that today everyone is interested.
30. Equally important to keep the accounts as trade.
31. Accounting reports acts as the marketing tool.
32. Why does business fail even after earning of profits?
33. What is window dressing?
34. How to trade on equity?
35. How to purchase good asset? – Capital budgeting.
36. How to protect business from over gearing and under gearing?
37. What is ROI? How can achieve it? How to maximize it?
38. To compare
39. Cause and Effect
40. Effective utilization of resources.
41. To divide properly profits of company into reserves, dividends and taxes.
42. Accounting is service like social service.
43. To find hole relating to accounting fraud – forensic accounting
44. To complete work on time.
45. I knew basics of social accounting.
46. To reduce the tax
47. Analyze the earning on the ploughing back of profits.
48. Increase the finance knowledge
49. To take steps forward from accounting education to educational psychology.
50. Adjustments, Adjustments, Adjustments….
51. To stay long time.
52. To do work step by step basis.
53. To become practical in life.
54. To write blog, and discuss in blogsphare.
55. To solve the problems of online readers.
56. To make online database in Google Docs.
57. To make Accounting Presentations.
58. To write article.
59. To establish the relationship.
60. Discipline.
61. To hold the pulse of business.
62. Friendship with Google.
63. Friendship with Tally.
64. Friendship with world.
65. Working Capital and its importance in management.
66. To hate the negligence.
67. Be happy on fault recovery.
68. To solve difficult practical questions first in examination.
69. Double checking.
70. Editing.
71. To identify myself.
72. To stand on my foot.
73. GAAP which were difficult to learn for me and I made simplified.
74. To know the importance of reconciliation of bank statements, accounts receivables and accounts payables.
75. To make accurate payroll report.
76. To keep an eye on budget.
77. To become professor.
78. To improve my English. It is my second language.
79. To learn computer and basics of Information Technology
80. To make the Video of Accounting Tutorials.
81. To study Indian laws.
82. To help commerce students for making career in accounting.
83. No Accountant of world is perfect in accounting.
84. Historical Intelligence is also very important.
85. To do something new instead of maintaining accounts.
86. To argue relating to solution of accounting problem.
87. To become troubleshooter.
88. To investigate.
89. I accepted uncertainty of accounting solution as blessing.
90. I learnt also taking fast decisions in this field.
91. It has not only opened new doors for me but also gave me new idea to enter.
92. It is possible for accountant to say me thanks when next day, I will open my email account.
93. It taught me basic things to record the books of other countries.
94. Computer accounting is easy than manual accounting.
95. Making the accounts in excel & Tally.
96. I succeeded to solve the problems of UK, Singapore, UAE, Africa and USA.
97. Achieved specialization in investment and multicurrency and goodwill accounting.
98. To learn more and more new but advance.
99. Learning from experienced accountant is very necessary to become perfect in accounting.
100. Accounting is repository of knowledge. If I have learned from accounting education. It means I have learned some mathematics, economics, business study, management, company laws and sociology because there is strong coordination between accounting and other fields of education.

After 100 things I’ve learned from accounting education but still I have to learn next 100 things. Wait, I will share with you.

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Entries in Journal Voucher (F7) of Tally

There are many accounting entries which will pass Journal Vouchers whose list are following

1. Fixed assets purchase on credit


2. Adjustment entries


3. Rectification entries


4. Depreciation entries

5. Provision Creation entries

6. Entries of Tax payable

7. Entry of drawing in case goods are taken by enterprise from business for personal use .

8. Given of Goods as Sample or Gift's entries.

9. Crossing of two entries each other for adjustment . Suppose , we have sold $ 20000 goods to Sham and taken from him of $ 10000 . Both sale and purchase are on credit and deals are also done with same person . So , $ 10000 sale can be cancel with $ 10000 purchase by passing entry in journal voucher Debit Sham account with $ 10000 and Credit Sham Account with $ 10000.

10. All transactions' entries which will not go to any other accounting vouchers .

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How to Make Consignment Accounts in Tally.ERP 9 without Doubt ?

If you have learnt financial accounting, consignment accounting is just accounting record of consignor and consignee. Consignee is the commission agent and its duty is to sell the product of the party and that part will be consignor. Consignor sends the goods to consignee for sale purpose and but it means that it is not purchased by consignee or agent. Therefore, its accounting action is different from normal accounting treatment of sale and purchase transaction.

One of new feature of Tally.ERP 9 is to track the sale by consignee. For this, a step by step guide is given for proper accounting treatment of consignment accounts in the books of consignor and consignee.



Accounting Treatment in the books of Consignor

1st step: To create the company and Stock items

First of all consignor creates his company in his books , suppose svtuition.org has started the business of selling accounting books by making the network of distributers in India . For this purpose, I have to create the items which I have produced and I have opening balance in my godown. For this purpose, I have to click inventory info and add stock items and also add unit of measurement by pressing alt + c and create pc for piece.


2nd Step: To change the features F11 of Tally.ERP

Click the feature button right side and go to inventory option. Click it and note down yes in the front of maintain multiple godown


[* Important Note: Tally.ERP 9 understands after creating the feature that you want to transfer stock from one godown from another godown for selling by agent.]

3rd Step: To record the transaction of transfer goods from consignor to consignee


This transaction will record in Inventory vouchers in the gateway of tally. When you click inventory vouchers, you will find right side three button one is STK JRNL, other is Receipt note and another is dely note. Stk jrnl means stock journal, in this journal you have to write items





For my example, I have to write books and its quantity suppose, if I am transferring 200 books to my consignee Delhi distributor, then it means I am transferring my stock from my main location to my Delhi godown and write also cost price and then when you will enter you will reach destination right side and enter the name of item and if you not make godown then make Delhi distributor godown by pressing alt + c (short cut key ). and then





Accounting Treatment in the books of Consignee


When consignee or agent will receive the stock from consignor, he will also open tally.erp 9 and alter the features F11 and write yes in the front of maintain multiple godowns and also write yes use tracking number for receipt and delivery notes. He also create stock item in my example, Delhi distributor will create stock of books which he has to sell on the behalf of svtuition.org publisher.


Go to inventory info >> stock units >> Create


After this he will record this received goods in receipt notes


Go to inventory voucher >> see right side receipt note >> click and pass the receipt note with zero value , because stock is moved but ownership is unmoving , and record the quantity which he received from consignor . For this purpose , he has to also create godown of svtuition.org consignment and also create svtuition.org consignment account in ledger creation .





Now when goods are sold by consignee then further transaction will be recorded .
Suppose my delhi distributor sells the goods to the Delhi public school . Now , he will not pass the voucher entry of sale but he pass the voucher entry of delivery notes .





Go to inventory vouchers >> see right side and click on delivery note >> pass the delivery note with sold quantity of books .

Then he print this delivery note and inform consignor that he stock or its part are sold by him with attached bill of delivery note . He will also send his earned commission bill by passing in accounting vouchers and printing it from computer .

Svtuition.org consignment account Dr.xxxx
Commission account Cr. Xxxxx

It is calculated on certained percentage of sale which have agreeded both consignor and consignee at the time of consignment agreement .

Again Accounting Treatment in the books of Consignor

When consignor will get the delivery note from consignee ( Delhi distributor ) . He will raise the sale invoice on Delhi public school showing goods out from the godown . For this purpose , consignor has to create Delhi distributor account and sale account in ledger creation .

Delhi distributor account under debtor account
Sale account under sale account

He will also passed the payment entry , if he paid commission to agent .

Commission of delhi distributor account dr.
Cash/bank account cr.

Above record is just sample about how the system is generally used while accountant appoints to record these type of transactions . But I have experienced that after connecting Tally.ERP 9 with .NET , consignor and consignee can reduce steps in above accounting system . If accounts are maintained online , then only consignor books are to be maintained in both . But it only possible , if agent is appointed by consignor only for sale of his products but if agent is working independently , then you have to follow above procedure .


The above procedure of passing the delivery note and inform to consignor will continue when consignee sells any new product of consignor . At that time he will also raise new bill on the vendor for his commission towards services rendered by him . Tracking number writing is also very important because consignor will know what product is sold from which consignee. Suppose , if consignor sells his products from than one consignee , then he will compulsory to all consignee to activate tracking number features in delivery notes . After this consignor can analysis more scientifically which consignment agreement is more benefited for him.

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Develop the Personality of an Accountant With Seven Qualities

Probably , You have gone EzineArticle.com . It is the site which allows expert authors in hundreds of niche fields to get massive levels of exposure in exchange for the submission of their articles . In this site anyone can write and submit the article but these articles are approved by its Approval Team . Approval team may accept or reject the article .

Last week , I have written the one article " Seven Qualities to Develop the Personality of an Accountant " for EzineArticles.com which is approved today . This article is of 1040 words . In this article , I have written Seven Qualities which an accountant should acquire .

Personality word is as old as the history of human being. From time to time, new things happened and human being had tried to develop his personality. But these days development of personality is totally relating to profession. If you want to succeed in accounting field , you have to keep certain professional qualities with in you . I am sharing you these qualities. Read full article at here .

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Which People are Considered to Be Most Important? Hr or Finance?

Hr and finance both are the basic departments of any business organization and both departments needs people to do the work. Some persons consider that Finance officers are important and other think Hr officers are important but my accounting is that both are important if they do their duty honesty. If we compare their duties, then we find that responsibility of finance officer is more than Hr. Officer due to he has to manage company’s fund. Fund is blood of Company. He has to select the resources and has to make its budget for proper utilization. But we can’t consider the value of Hr. Officer less in an organization because whole responsibility is on the shoulders of Hr. Officer.

Before taking decision one sided, you have to become more perceptive and should review following approaches.

Career Approach

If you want to think this question because of you want to make your career in one of them, then don’t make importance as one of main determinant to choose any one of them. Try to understand, there are also other factors which may affect your career. Suppose, if you are habitual to watch business news, financial updates and other finance news. Then, this attitude shows your interest in Finance. Hence there will be no benefit to enter other field Hr. or even entering in Marketing. Concentrate on career or niche which you love. This field will be surely most important.

Organizational Approach

Organization respects on those officers who perform well. If you will perform well in finance, you will be most important people in Finance. If you will perform well in human resource management, you will be most important person in Hr. It is most important to know that organization is just link between people and resources. Finance as well as Hr. people have to accomplish one target of organization. So both are two part of one coin of organization.


Job Approach

If we verify the job duties, we get some common point between both. Suppose one of finance officer’s duty is to maintain the salary record of all employees of company. On the other side, Hr. officer uses these data for analysis for employees’ promotion, merit rating, job analysis and other compensational plans. Finance department’s all need of employee is fulfilled by Hr. department and Hr. department’s are need of financial record is fulfilled by Finance department. So, both are doing job for fulfill their own needs. You can get idea from this approach that both are the jobs and set of duties which they have to fulfill because authorities are delegated to them. So, consider both significant.

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Short Cut Keys of Google Docs

Google Docs is not only important for accountants but also for all others who are in physics, chemistry or other science fields because mostly all shared projects , documents and data base are being made in Google Docs . For increasing office productivity , it is essential to learn and use practically short cut keys of Google Docs .

In following chart , you can see all short cut keys of Google Docs . With this , you can operate Google Docs more fastly and save your worthy time for feeding data in this . Some of them are working by Ctrl + specific word and Other can be operated by pressing Ctrl or shift + specific word . Use these Keyboard shortcuts to save time and more utilizing keyboard skills without use of the mouse.



Applications of above Short Cut Keys in Google Docs

Like ms office has divided into ms word , ms excel and ms power point . Google docs is also divided into three basic parts . One is documents , other is spreadsheets and presentation . Above all short cut keys may apply on all programmes or specific programmes .

[Yes means above short cut will apply]

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Don't Hurry to Delete Gmail Account : Bug in Change Owner of Google Docs Functionality

Yesterday , Google employees announced new features relating to changing of ownership from one owner to another . But today , one of user of google docs got the ownership from his employee but due to bug in "Change Ownership" Functionality , he is not accessing even after becoming the owner of google docs document. So , don't hurry to delete your GMail account even after transferring google docs ownership to other party or collaborator.




What is the problem ?

from sue s.'s discussions in Google Docs forum

" Our company has been using Google Docs for about a month now. An employee
created a few documents and later transferred ownership to me upon my request. I got an email confirming this and I visited most of the documents that day. Two
days later he deleted his account and now I cannot access any of the documents
he created even though they are on my list of documents and show me as the
owner. This goes for docs that I visited and edited post-ownership transfer and
docs that I never visited or edited post-transfer.I've cleared the cache,
deleted all Google cookies and restarted my browser.None of these docs are
critical of course but it is not how I expected the software to behave. Any
advice [ Thanks Sue ]

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Google Docs Finally Makes It Easy to transfer Ownership All Your Documents

If following questions' answers are in yes , then you can change your document's ownership in Google Docs :-

1. Are you no longer the owner of a document, spreadsheet, or presentation?


2. Do you want to delete a doc but other people with whom you've shared the doc still have access to it ?


3. Are you move from GMail account to your company's domain via google apps account ?

Large number of professionals are working for others under their business contracts for making educational projects , accounting works and notes online via google docs . After launching this feature , it is very easy to transfer ownership to other people . It can also used on the place of all data export feature of google docs , because after changing ownership , we can not change the document without the permission of other person .

After this release , transfer ownership in Google Spreadsheets will become available. I am really excited to let you know that you now can assign new owners to spreadsheets quickly and easily.

Just Open google docs → More Action → Change Owner

{* Ref .} Google Docs Help Updates

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Set Features of Tally.ERP 9 in Hindi

If you want to Set different feature in your mother tongue Hindi after understanding its effect . For this first of all click language button on the top in gateway of tally and then you will see that all things have converted in Hindi language and now click F11 and set features of tally.ERP 9 in Hindi .

Two features will be still in English

one → will Show opening balance for revenue items in Report . It means when you click yes in Main Cost Center" after this you can set opening balance for revenue items in report .

Second → will show when you click statutory features . After yes Enable Excise you can set excise details .

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Download All Your Files from Google Docs

Many Accountants and other Financial Officers apply Google Docs as their accounting data base which is made generally collaborated bases . Now , you can secure your all google docs data in your hard disk's drive just one click of Export All after selecting all documents in Google Docs .

This new feature will also helpful to publisher and Google bloggers who have shifted from gmail account to custom domain(Google Apps ) like me . Now , I can firstly download all my google docs files which is gmail account svtuition@gmail.com and then upload google docs at vinod@svtuition.org .

Steps to download all google docs files in gmail account :-

Go Google Documents >> select "Export" under the "More Actions" >> select the "Export All" check box.

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Know Full History of Accounting Education Blog - It will soon turn 2

I have started “Accounting Education” blog since 19 Jan 2008 for helping commerce students, accountants, business organizations and Accounting teachers. It is very interesting story to start this blog. Before Jan 2008, I did not have knowledge about blogging. Even, I had known that many professors had their own websites where they wrote their contents.

One day, I had read the blog and read about what is blogging and how can it monetize with Google adsense or other sponsorship after this I have started this blog and choose the name of svtuition. Actually this is my academy name sv means Swami Vivekananda who was the great teacher of world. Tuition means that education system in which teacher teaches small batches. I have started my blog my with its url name http://svtuition.blogspot.com/ . Blogspot is domain of blogger and every blogger when starts free blog on http://www.blogger.com/ , then he has to give name of blog before .blogspot.com. After this, I have bought custom domain name http://www.svtuition.org/ from Google in Sept. 2009.

I have written my first post “How to Get Self Confidence ”, this was very small article I suggest that hard work, practice and faith in God are very important to get Self Confidence. I got first comment after 23 posts on the article “ How Can Get Education ” from Tally Helper and Most Comments , I found on the article “ Ledger Creation in Tally 7.2 ” . Up to this date, my blog has obtained total 109 comments. I have written total articles 784(including this dated 9th Dec.2009) in this blog. This is some idea where can you reach in professional blogging. Writing on unique topics is not easy but everyday more than 175000 blogs are created in whole world and Every second two new blogs are created . Some of them are totally dead after sometime and some are doing struggle for living and opening the voice in this world.

In past two years, I have done lot of mistakes. Even some readers have given me some suggestions to improve these mistakes. I specially thank all those readers who have given their contribution in this blog by giving their worthy suggestion to me at my email.

This blog is read almost every part of world. I have kept two invisible codes one is of stat counter and other is of Google analytics to know who is watching which page and uses other statistics like page views, unique visitors, geographical area of readers and many more only for knowing the interest and problems of readers .

Some Interesting Story Relating to My Writing in this blog

1. I have written many articles by just seeing live need of users. For example one day , I saw that a Australian user was coming to reading [ “ Accounting Education System in India ”] in my blog , but I could not write it that time . So, after this, I have written same article to help my live users.

2. One day, one of my friend and reader of Accounting Education blog had sent me email. He wanted to know what is the current rate of service tax . At same time, I have written a small article “ Amendment in Service Tax in 2009 ” . Next day , when , I checked same query in Google . I felt happy to know it was on the first rank of first page of google .

3. This is accounting education blog so, almost, I have written all articles relating to accounting, finance and education. But there are also exceptions of these. Some time, I found queries from readers who want to improve their English. So , I have written articles “ Tips to Improving Accounting English ” and “ How can Commerce Students improve their English ” . I recommend to read these two articles in which I have taken help from Phd Principle Dr. Mathura Das Sawtanter who taught English 41 years to School and College level.

4. Yesterday, I was reading article of the blog of Copyblogger “5 Essential Blogging Tips from the Father of Chinese Philosophy . I have liked its second tip “Everything has beauty, but not everyone sees it ” and its Lines are “Some posts you really put effort into and truly believe in might go unnoticed, while other posts you didn’t spend much time on can be the ones that set off an explosion of comments, tweets and links.” I saw this practically in my blog. I was not deep knowledge of Calculating the Impairment of Goodwill but after researching, I had written article “ Simple Steps of Calculating the Impairment of Goodwill ” in 4th Feb. 2009 . It is Superhit in Google up to now and see here .

5. I have never taught education subject, but after coming in blogging field, I have written many articles on education topics which have become famous in blogsphare. Some of them are “ Five Tips for Accounting Teaching” , “ What do You Want , You will Get it ” .

6. I have written some article after inspiring from other articles, “Some days ago, I have read the article “How to Overcome Blogger's Block” and after this I have written an article “ How to Reduce the Stress of Examination. ”

7. I have written many solution of practical field of Accounting and Finance . Different Countries’ Accountants [1][2] [3][4] [5][6] [7], Account Managers, CAs , ICWAIs , CPAs , Students[1][2][3][4] , bloggers and Other Financial Officers had sent query in Email box after reading accounting education blog’s earlier solutions of accounting problems.

8. I have also given many solutions relating to Tally 7.2, Tally 8.1, Tally 9 and Tally.ERP 9[1][2][3][4][5][6][7][8][9][10]. Making of videos in YouTube was also part of solution of tally.

9. I have also tried to aware nation about recent happenings in India regarding black money in one of my post .

10. I would like to say that I have enjoyed past time with this blog. My blog earning started Nov. 2008 and I have seen many up and down in this blogging profession.

In End , I want to tell you that I am still student for learning many advance concepts like html , CSS , ASP , PHP , JavaScript , MYSQL and SEO and Social Networking which is very necessary to succeed in professional blogging . I am learning while I am doing something in my professional field. There are large numbers of other great Educationist which you can find online on Google who are expert different topics of Accounting. From time to time, I am following them and try to build this blog more professional from education point of view. I also want support from my readers, Fans and other professional bloggers to make Accounting Education more useful to new readers. You can give your support by writing your guest articles, comments and suggestion to me at Vinod@svtuition.org .

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Two Disadvantages of Activity based Costing on the Basis of Reasonable Ground

1. Difficult to Calculate Some Overhead’s Cost relating to its Product

Many overheads or indirect expenses can easily assign to products. We can easily calculate inspection expenses per product, if we multiply per inspection rate with total no. of inspections. But some indirect expenses’ cost can not calculate relating to its product in activity base costing system. If such unallocated overheads cost is head, then whole system and calculated cost per unit under this system will befall incomplete.

For Example

Four 4 supervisors go to a restaurant. One of them does not want to eat, he orders milk. The others order full meal. The total bill comes to Rs. 5000/-; are you going to divide this bill by numbers of supervisors. In a sense, activity based costing is like this. You have to put the resources in the right activity, right pocket.

2. Customer Based Costing is better than Activity Based Costing

When a company gets order, at that time company has to complete it on time and some time company has to take short term debt due to purchasing of product, if company estimates its cost less. But some sometime, Company does not get its payment on time. So, Company has to pay highest interest due to delay of repayment of debt. Now, this is also cost which can not allocate the product but allocate customer. All other cost which we understand very high like manpower, maintenance does not affect the total cost of product. I think this is the limitation of activity based costing and customer based costing approach will better in given case.

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What does Vedas Scold in Students?

If you want to know , what does vedas scold in Students , read above mantra of Vedas . This is in Sanskrit . In India , its education is given to students in Gurukul from old times .


In this mantra Veda says

" There are Seven demerits of Students which , I mentioned below . These demerits are restricts of getting the education . Hence , for becoming sagacious , students should abolish these demerits "

List of Seven Demerits

1. Laziness
2. Use of drugs
3. Enter into Love-affair
4. Inconstancy
5. Becoming Fool
6. Arrogate
7. Cupidity

Student should pray , " God gives me power to save from these demerits . Student should also try to leave these demerits because after this he can succeed in the examination of education .

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