Provision for Doubtful Debts Account

In this video, you will learn the simple steps for preparing provision for doubtful debts account. For showing the correct amount of provision for doubtful debt, provision for doubtful debts account is made.

Before watching the video, you can also read previous article " Accounting Treatment of Provision for doubtful debts"

Simple Steps for making provision for doubtful debts account

1st: Show the opening balance of provision for doubtful debts account in the credit side of it.
2nd: Show total amount of bad debts (bad debts in trial balance + bad debts in outside of trial balance) in the debit side of provision for doubtful debt account
3rd: Show the closing balance of provision for doubtful debts in the debit side with new rates which is charged on sundry debtors.
4rd: If debit side is more than credit side, difference will be shown in the credit side with writing profit and loss account as balancing figure. Now total of both side of provision for doubtful debts account will match.

{ Important Notes: This balancing figure will go to the debit side of profit and loss account but if the total of credit side of provision for doubtful debs account is more than debit side total then difference will be go to the credit side of profit and loss account }

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Solution of Problem Which is Faced in Teaching Journal Entry in Accounts

Many accounting teachers may face following problem in teaching of journal entry in accounts.

Which account should be debited or credited

Basic rules of double entry system  are three and every rule have further two parts. But some time teacher can not teach perfectly these rules to 10+1 commerce students about which account should be debited or credited. I can explain this problem with following example.

Mrs. Rekha buys goods from Mrs. Sulekha of Rs. 500000 with cash.

It is possible that accounting teacher will write three rules of double entry on the black/ white board and then write its journal entry

Purchase account Dr. 500000
 
Cash account Cr.             500000 

Accounting teacher can argue that goods are being come in business so, it will be debited and cash is going from business, so it will be credited in journal entry.

But student may confuse or puzzle. He asks his accounting teacher. Why has he not debited to Mrs. Rekha account? Because goods are received by Mrs. Rekha. First rule's first part says who is receiver will be debited. This is the problem which is often faced in teaching journal entry in accounts.

I can help teacher to solve this problem. Persuade your student affectionately just like below

My dear student, it is very good that you are using your brain. You have asked me question. You are confused which rule of double entry will apply first or second for debiting or crediting account. Dear, first of all one important thing is that businessman can not be debited or credited himself in his own accounting books. You can ask me. Why can businessman not be debited or credited? Because business is separate from businessman. So, if we have to pass the journal entry in the books of Rekha, then even Rekha has received the goods, then we can not debited owner of business. Moreover, there is not a specific person, it may possible the goods can be received by employee of Rekha's business or even relative of Rekha can receive the goods. So, second rule is more powerful than first rule of double entry. What comes in business must be debited. So, I have debited Purchase account. I have also credited cash. If we purchase the goods with cash or via cheque. There is no need to know who is the giver of money . Forget his name. In one day, it is possible that you are dealing with 1000000000000000000000000000 people for purchasing or selling. Record their names only in books, if you have to pay or get money. Otherwise your accounts book will become just list of customers or suppliers. If you are interested to know customer. Determine the aim of your life as  salesman not accountant. So, if Rekha has purchased goods with cash, then who only credit what goes from business and that is cash. So, cash will be credited.

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All Pictures with Accounting Tag in Flickr in 2009 - Slideshow

Following is the slideshow of all accounting pictures which were uploaded in flickr in 2009. I have made this slideshow by just writing accounting in flickr search engine and then click advance option and then selected picture by taking date after 31/12/2008 and before 31/12/2009. I hope you will enjoy to see all pictures of accounting in one place.

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Bank

Banks are just like commission agent. But, there are many differences between bank and commission agent. Bank secures the small saving of people and also provides interest on these savings. Bank uses this fund for productive area by providing loan to industries at cheap rates. Bank has very important role in economy. If we forget one exception of Swiss bank that saves black money, then we find bank as social worker for society. It is service area and it is very helpful to reduce cash in hand. By depositing fund daily in banks, businessman can sleep without tension. Every bank does his work under the strict rules and regulation of Central bank of every country. Central bank is just like boss but it works with co-ordination and co-operation. It can control credit by just applying different decisions.

Do you know?

1. In USA, banks can not do non financial activities. I try to make you understand. In USA bank can save the fund and give loan but it can not contract with any company for doing non financial activities or not do itself.
2. Earlier, I did not know that banks of Germany are allowed to do all non-financial activities with their financial activities.
3. Most of banks of France are providing the service of insurance.
4. System of bank accounting is so quick. After every transaction in the form of deposit money in bank or withdraw, you can find your bank balance through your pass book. After deposit money in bank, bank will credit your amount because, it is the liability of bank but it will increase your asset and if you withdraw the amount bank will debit the amount because, with this bank’s liability will reduce.

Functions of Bank

1. Bank provides overdraft and short term loan facility.
2. It also provide Safe deposit boxes to secure valuable possessions, such as gemstones, precious metals, currency, marketable securities, or important documents such as wills property deeds and birth certificates that need protection from theft, fire, flood, tampering or other reasons.
3. It also issues the bank draft and bank cheque on the request of customers.
4. It also gives the services of currency exchange. You can go to any bank and change your foreign currency into your country’s currency. For these services bank takes some commission.
5. Bank also sells the financial products.

Advance Techniques which are using in banks

1. Almost all banks are using Finacle software for bank accounting.
2. Banks have opened large number of ATM branches for fast payment to customers anytime and anyplace.
3. Mobile banking and Telephone banking.
4. Video banking and videoconference.
5. Online banking under secure website.

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5 Steps for Filing e-TDS Return with No Trouble

Filling e-TDS return is compulsorily for company and government deductors as per section 206 of Income tax law. So, it is the need of time to learn how to fill e-TDS return, if you are interested to work as accountant in company or government sector.

Before learning simple steps, you should know, what is e-TDS? E-TDS means electronic tax deducted at source. It is duty of above mentioned deductors to deduct the amount income tax when they pay to others and prepare return in form No.24, 26 or 27 or 24Q, 25Q or 26Q  in electronic media as per prescribed data structure in either a floppy or a CD ROM. The floppy or CD ROM prepared should be accompanied by a signed verification in Form No.27A.




Central Board of Direct Taxes (CBDT) has appointed National Securities Depository Ltd. (NSDL), Mumbai as e-TDS Intermediary.

5 Simple Steps for filling e- TDS Return

Ist Step

Choose the format or data structure for preparing e-TDS return

Income tax department and NSDL have made different format according to nature of payments. So, accountant should choose any one from following format.

1. (a) Annual e-TDS return:

o File Format for Form 24
o File Format for Form 26
o File Format for Form 27

(b) Annual e-TCS return:

o File Format for Form 27E

(c) Quarterly return:

o File Format for Form 24Q
o File Format for Form 26Q
o File Format for Form 27Q
o File Format for Form 27EQ

Data structure for Form 24Q of the quarter ending 31-March

2nd Step

E-TDS return for successful acceptance

1. E-TDS clean text ASCII format: You can use any software like ms excel, compu tax or Tally.ERP or NSDL’s software Return Preparation Utility (e-TDS RPU-Light) for making e-TDS return but E-TDS file formats must be in clean text ASCII format with 'txt' as filename extension.
2. Correct Tax deduction Account Number (TAN) of the Deductor is clearly mentioned in Form No.27A as also in the e-TDS return, as required by sub-section (2) of section 203A of the Income-tax Act.
3. The particulars relating to deposit of tax deducted at source in the bank are correctly and properly filled in the table at item No.6 of Form No.24 or item No.4 of Form No.26 or item No.4 of Form No.27, as the case may be.
4. The data structure of the e-TDS return is as per the structure prescribed by the e-Filing Administrator.
5. The Control Chart in Form 27A is duly filled in all columns and verified and as enclosed in paper form with the e-TDS return on computer media.
6. The Control totals of the amount paid and the tax deducted at source as mentioned at item No.4 of Form No.27A tally with the corresponding totals in the e-TDS return in Form No. 24 or Form No. 26 or Form No.27, as the case may be.
7. Bank Branch code or BSR code is a 7 digit code allotted to banks by RBI. This is different from the branch code which is used for bank drafts etc. This no. is given in the OLTAS challan or can be obtained from the bank branch or from www.tin-nsdl.com. It is mandatory to quote BST code both in challan details and deductee details. Hence, this field cannot be left blank. Government deductors transfer tax by book entry, in which case the BSR code can be left blank.











3rd Step

Validate or verify your prepared e-TDS return

After the file has been set as per the file format, it should be verified using the File Validation Utility(FVU) (download here ) provided by NSDL.





4th Step
Rectify the errors and verify the file

In case file has any errors the FVU will give a report of the errors. Rectify the errors and verify the file again through the FVU.





5th Step

Filling of e-TDS Return

A ) Go to TIN – FC ( center) near to your office

e-TDS returns can be filed at any of the TIN-FC opened by the e-TDS Intermediary for this purpose. Addresses of these TIN-FCs are available at the website on http://www.incometaxindia.gov.in/  or at http://www.tin-nsdl.com/ .


B) Filling of e-TDS Return Online

Now, you have also facility to file your e-TDS return online for this you have to register to NSDL.

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Amendment in VAT in 2010

According to the new  notifications of different states govt., VAT has been increased  from 4% to 5%. Traders are now responsible to pay 5% VAT on all goods which were  charged 4%  and 10% sercharge on VAT is also payable. In these states, we can include Punjab, Delhi and some other states.

According to Times of India  

Delhi shifted to a 5% Value Added Tax (VAT) slab from 4%. The shift to the 5% slab will impact the prices of medicines, surgical and medical equipment, IT and electronic products like computers and software, and industrial inputs, among other things. The five percent slab will cover 170-odd items.

But Delhi Fianance Minister AK Walia is clear the shift to the 5% slab is in keeping with the Central Government's directions on the VAT regime. "All items under the 4% slab in the VAT Act are now under the 5% slab. The shift to a 5% slab will lead to an escalation in revenue collections," Walia said.

According to Punjab Newsline

The SAD-BJP two member committee formed BY Punjab Government to suggest new resources of revenue has recommended to increase VAT from 4 to 5 percent and impose an additional 10 percent VAT in lieu of octroi. The Committee also recommends the imposition of entry tax to protect the local industry.

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History of Accounting

History of Accounting is as old as business. If we open wikipedia's page about Accountancy, then we come to know it is old more than 7000 years. In that time, people were used accounting records for knowing profit or loss from their agricultural output. They had made clay accounting tokens  for showing their personal property separted from other person's property. Watch   "History of Accounting - Ist Part Video" in simple hindi  which is specially made for indian 10+1 commerce students for making accounting interesting.

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Video Tutorial for Passing Voucher Entries in Contra Voucher in Tally.ERP 9

In this video, you will learn very easy steps of passing voucher entries in Contra voucher in Tally.ERP 9. Basically, we pass only the transactions in contra voucher ( F4) which are related to cash, bank and bank overdraft. If you have deposited the amount in bank or you have withdrawn cash from bank or get bank overdraft from bank or payment of bank overdraft to bank.

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Accounting Education is Nice Site to Give Help on Tally- Quote from Shailendra S Yadav

Today, Shailendra S. Yadav Ji  the author of Apnitally  has written the very good article " Some Nice Sites to get help on Tally" in which he told good resources which  are providing education of Indian Accounting Software Tally. In these resources, he has included Accounting Education .

First of All thanks Shailendra S. Yadav Ji for expressing your views for Accounting Education, I think that your written  Apnitally Blog  is still No.1 site for providing the education specially only tally topic and your way of explaining is the best.  But, you should write continually because readers always wait the new articles and as publisher, we should not miss our readers. In my blog "Accounting Education", tally is just part of Accounting Education and I also believe that there is no need to write long long articles, if small small articles solve problems of readers with in very small time.

In his own words

Accounting Education: Developed by Mr. Vinod Kumar from HP, this site has small small articles. But I envy his frequency of writing. Readers can get basic knowledge articles also. Site has nice design and is on blogger platform.

One more thing, I want to tell you and my other readers that I belong to Punjab not HP (Himachal Pradesh).

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How to Connect database with Tally 9.0?

Q: I am Kuthbudeen and I am working as a programmer in an institute in UAE. I have a doubt on tally software. How to connect database with tally 9.0? Is it possible to Connect?

Ans.: Yes, it is possible. It is possible through ODBC connectivity  or  through SQL server connectivity in Tally.ERP 9 version

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Cash and its Importance and Control

Cash is one of the important finance terms and it is also part of money. If money is in the form of currency, then that money becomes cash. Cash in business is the asset but if cash is in reserve form for completing future obligation, then it will be liability of business. After, deducting reserve amount, we can use balance cash for our business purposes.

Our old elders were used to save money in money box. So, cash’s also other meaning is money box. These days, cash has become more important because, all financial results are analyzed on the basis of cash flow statement. If we receipt cash between two accounting period, it is inflow of cash and if we have paid between two accounting period, and it is outflow of cash.

Importance of Cash

If we understand what is cash, then we can also understand analyze the cash position of business. Is it sound or weak? What amount will be needed for paying different payments? Good knowledge of cash will provide you the  power to make good planning of cash for future needs.

Control of Cash

As cash is a liquid asset so, it is easy to transfer or exchange. Large number of accounting and financial scandals are relating to misappropriating funds, money and cash. So, it is the prime duty of account manager to manage cash daily basis from point of sale and should send it to bank. Effective internal audit of cash is also useful for effective control of cash. If the organization has independent department for checking cash physically, then it is minimum chance to commit fraud in cash. To accept and pay the payment via electronic form is good way to reduce cash dealing. With this, no need to keep large amount in business office.

Learn Cash Handling Control from Video

This video highlights common cash control weaknesses and how to fix them.

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How can Small Businessman Use Tally.ERP 9 Himself for Keeping Accounts?

Problem

My name is Chetan.  I just want a suggestion from you I own a small business I maintain all accounts related to my work on paper....but I want to learn tally  software to keep my accounts. But I have no idea of how to use tally can u please help me out with this problem.

  

Solution

 If you are interested to maintain your all accounts in tally, then it is not difficult to learn this software. If you know manual accounting and double entry rules, you can fastly learn tally. If you have downloaded  and installed tally.erp 9 educational version for learning purpose and when you open it in educational mode, you should keep following points while you are operating tally.erp 9.

Ist Point #

 After this, first time when you open tally.erp 9, you will see company info and in this you have to create company. Simple fill the creation form and you can create company.

2nd Point #

Now check your manual balance sheet.

You will see some assets and liabilities accounts in your balance sheet with amounts.

Go to gateway of tally.erp

And make ledger accounts under different head. See direction from here.

Gateway of tally.erp 9 >> company info >> ledger >> create >> multiple ledger creation

When you are creating ledger account you have to add opening balance of your manual balance sheet items. Suppose, your balance sheet is showing building of Rs. 60,00,000, then it ledger account building under fixed asset will be open with opening balance  of Rs. 60,00,0000.

3rd Point #

When you create and add all ledger accounts, you can see balance sheet in tally.erp 9. It must be same as your balance sheet which you have made from manual accounts.

4th Point #

Now, stop maintaining your accounts manually. All your accounts' balance have been automatically transferred in tally.erp 9 and now, record you transaction only in tally.

 Because you are doing very small business, no need to record the transaction when happen. Collect all bills, receipts and vouchers and invoices. After week or month, feed it in tally.

Suppose, in month there are 20 new customers have purchased products from you.

Create there ledger accounts under debtor by mentioning their names. Same if you have purchased from 20 different suppliers add their names also. After this click Accounts vouchers. This button, you can see gateway of tally.erp 9 and in this right side you will receipt voucher, payment voucher, purchase voucher and sale voucher and journal voucher button. If you have graduated in Commerce, then you would know that in manual journal can also sub- division in cash book, purchase book, sale book and journal proper. Same funda is using tally.erp 9

Suppose, you have received cash or cheque from party, then enter it in receipt voucher. If you have to pay in cash or via cheque enter it in payment voucher.

 5th Point #

 Inventory management

First of all create units measurement in inventory info.

Gateway of tally.erp 9 >> inventory info >> unit measure

After this create your all stock items by mentioning opening balance of each stock item.

I do not know what is your business? But you must record all stock items in

Gateway of tally.erp 9 >> inventory info >> stock item

When you create all stock items, you can pass the voucher entry of purchase and sale.

After concentrating on different button and practicing these buttons, you can become expert with in few days.

There is no need any other work in tally.erp 9. All reports are automatically made by tally.erp 9.

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Effect of Changing Accounting Period from Jan- Dec. 2009 to Apr-Mar. 2010

Large companies are changing their accounting period from Jan-Dec. 2009 to Apr-Mar 2010. By doing so, the companies would be required to publish balance sheet only for the fiscal year which is also the statutory requirement under Income-Tax Act, instead of preparing separate financial statements for two different accounting periods.
Accountants of these companies have to make 15 month's final accounts. All the accounting results from 1 Jan. 2009 to 31st March 2010 should be added in the profit and loss account for the period of 15 months. Balance sheet will also show the the changing in the financial position of company of 15 month as on 31st march 2010.

It is mandatory for Indian companies to prepare balance sheet for April-March period for income tax purpose. It makes sense to follow common accounting period of April-March to avoid inconveniences caused by the shortage of manpower and extra cost that goes into preparing two balance sheets for different periods," said Bhupendra Shah, a Mumbai-based chartered accountant. He also feels comparison of financial statements is possible between group concerns or industry peers when a common accounting period is followed.

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Should GST be delayed?

ICAI wants that GST should be delayed in his press notice at ET 

" For smoother transition, it is imperative that GST be implemented from the first day of a financial year. Since there is very little time for the slated implementation date of April 1, 2010, it is recommended that GST be implemented from April 1, 2011.

Goods and Service tax is new revolution in Indirect tax. After applying this GST, all indirect tax like VAT, service tax, excise duty and other sale tax will be terminated. Govt. of India was planning to implement of Goods and Services Tax from 1st April 2010 . But ICAI wants GST rollout to be delayed by a year.

ICAI is giving argument that states governments are not ready for these changes.

 I think whatever ICAI says in press notice. Government of India should see the benefit  of assessee who is  facing difficulty by implementing different rules and regulation and should implement GST as soon as possible. But, Govt. should  safeguard against an increase in liability for suppliers involved in such contracts from an adverse impact of higher taxation rates under GST.

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Money

Wikipedia has already defined and explained money in its 3437 words long article . I have read it. It is written from economic point of view and most of books are defining what is defining by Wikipedia. It is true that money is medium of exchange, unit of account and store of value. Ok, but modern theory of money also includes other securities which can deal in money market. We can take example of bill of exchange, short term govt. securities and other short term loans.

From financial point of view, area of money is broader than Wikipedia’s definition of money. RBI also issues short term loan when any bank  needs of short term fund. So, money can not bind just in cash or bank money. Cash, cheques and currency notes are the major things of money. But in Finance, everything is money which is deal in money market. Financial Instruments or papers and commercial papers and Commercial bill are also the examples of money.

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Saving

Saving refers not to consume all earning and keep some part of it in bank or in home or in business, so that it can be used for emergency time.  Saving is good habit of life and it is very important for progress of company. In company business, all provisions, reserves and funds are the methods of saving. It is also important in personal life. In personal life, sometime, you need money, if you had saved in past, then you can use that saving in this situation. All wise person’s advice to save money. If you have started saving, you are so Intelligent.

In beginning, when you start saving, it will be difficult for you to save from your routine expenses. But, you can save by reducing your unnecessary expenses. You can save very small amount on monthly basis. After this you can increase your saving. If you have invested it in good business, then you can earn high interest with your principle amount.

Now, question is raised, how to save money?  First of all, we have to determine the aim of saving. Aim tells you, why are you saving? How much amount, are you needed? How to manage this amount?  Suppose, you have aim to make your own house, to purchase your own vehicle or to establish your own business, for fulfilling all these aims, you need money and money can only comes from saving. For achieving high objectives, you need big money. If time is very less, then it may be bigger. So, before fixing your aim, check you’re earning capability. If you have to buy your own home in next year, you need to save higher proportion of your monthly earning.  Otherwise, you can save 5% to 10% of your monthly income.

Next step is to reduce your unnecessary expenses. Suppose, you’re all family members have their own car and they have to go in same destination. Then, you and your family can use one car for reducing petrol expenses. Reducing of one dollar means saving of one dollar. If you have internet connection with high speed, you can make it as entertainment media and cut out cable expenses for reducing your expenses. Like these, there are large numbers of superfluous expenses which you can reduce by tracking your daily expenses. For this you can use your notebook or ms excel sheet in which you can record your daily expenses and after week, you can check it and you will find that some of them are useless and excess. So,  avoid these expenses for increasing the amount of saving.

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Fund

Fund means any asset in the form of money which is kept for special purpose. It is special term of finance which is used for getting earning or increasing resources. Now, you would understand what is fund?

In generally, it is collection of financial resources.

Why is fund  needed ?

You would see the fundraising department in NGO, the volunteers of NGO create fund and collect money for social works. But in corporate sector, fund is collected for development of company and earning on investment or repayment of loan.



Learn Fund in Plain English from this Video





Accountability for usage of fund

If fund is created from public money, then trustee of fund are accountable about its usage.Fed Vice Chair Donald Kohn testified before the Financial Services Committee, along with John Bovenzi of the FDIC. The Fed's balance sheet has expanded by $1.2 Trillion Slush Fund. since September 1. Where did the money go? Kohn said usage of this fund. But I think that he did not explain clearly.

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List of Units of Measurement for Accounting of Inventory

If you are doing accounting work of different companies, then it is must to know all the units of measurements. I have searched on Google and I did not found the complete list of units of measurement relating to every company’s product. So, I am trying to make complete list of units of measurement of companies' products. Before, writing the list of units of measure, I am interested to introduce you about unit of measurement.

A unit of measurement is standard amount of quantity which is fixed after scientific rules and regulations.

Importance of Units of Measurement is universal

Calculation of unit of measurement is very important for every field. Without correct measurement, we can waste our large amount of money and time. Even past accident like failure of NASA Mars Climate Orbiter in Sept. 1999 due telling wrong value of measurement of forces.

Small errors being introduced in the trajectory estimate over the course of the 9-month Journey. At the time of Mars insertion, the spacecraft trajectory was approximately 170 Kilometers lower than planned. As a result, MCO either was destroyed in the atmosphere Or re-entered heliocentric space after leaving Mars’ atmosphere. Read NASA PDF report at here .

Importance of Units of Measurement for business

Measurement of stock items  is needed for calculation value of inventory of every company. When a company purchases the goods, all quantity of purchased goods is in specific units. Without unit of measurement, we can not calculate the total purchase value or sale value, if there are large numbers of stock items.

Suppose, your company is doing retail business and it purchases the stock lower at cost and sells higher price. Then, it generally calculates the price of sale and price of purchase on the basis quantity which is measured in kilograms, pieces and some time liters. Kilograms, pieces and liters are the general units of measurement. But, there are large other company which are using different units of measurement, so providing professional accounting services at international level, you need to know all the units of measurement. After this,  you can calculate the price of purchase and sale correctly.

1. Units of Measurement for Calculation of Weight or Mass of products

Some products like agricultural or consumable are purchased and sold on the basis of products’ exact weight. So, we are starting our list from these units.

a) Kilogram

The kilogram (symbol: kg) is the base unit of mass or weight. When we go to market and say vendor to pack 5 kg sugar. Then, he will measure weight of sugar on the basis of kilogram and shows us  the prices.

Name of Unit = Kilogram

Symbol = Kg

b) Gram or also gramme in British English

If one kilogram is divided by 1000, then we can find the value of gram. It is also unit of measuring weight. When, a customer wants to buy less then one kilogram, then it is necessary to measure in grams. In small trade, this unit of measurement is very usable. In other words one thousand times of gram will be equal to the kilogram

Symbol = g or gr.

c) Milligram

Milligram is used for calculating the weights of gold and its products. If we want to convert milligrams into one gram, then One thousand milligrams always equal one gram.


d) Quintal

a unit of weight equal to 100 kilograms. Its symbol is qt.

e) Tonne

Tonne is a measurement of mass equal to 1,000 kg.
A metric unit of mass equal to 1000 kilograms. Symbol: t
Metric: 1 tonne = 1,000Kg (kilogram)

2. Units of Measurement of Volume of Products

Some products are bought or sold on the basis of volume of product. These products are in liquid shape and we can use following units for its measurement.

( a ) Liter - l

Liter is a unit of volume . Its symbol

( b ) Milliliter

A milliliter (abbreviated mL) is a measure of volume. 1000 milliliters equal 1 liter. 1 milliliter is also equal to one cubic centimeter.

1000 mL = 1 L

•  One litre is slightly more than one U.S. liquid quart and slightly less than one Imperial quart or the less common U.S. dry quart.
• One measured cup =250 mL.
•  One teaspoon =5 mL (In some countries, this is an exact equivalency by definition of the teaspoon.)
• One tablespoon =15 mL (In some countries, this is an exact equivalency by definition of the tablespoon.)
• A litre is the volume of a cube with sides of 10 cm, which is slightly less than a cube of sides 4 inches (or one-third of a foot). Twenty-seven cubes "one-third of a foot on each side" would fit in one cubic foot, which is within 5% of the actual value of exactly 28.316846592 litres.
• A nice aide-mémoire is: "A litre of water is a pint and three quarters" (Imperial pints, that is). Or, simpler: "A litre is a kilo of water" (the litre was once defined in a way that made this exactly true under certain conditions).

( c ) Barrel ( for measuring petroleum products )

Barrel is unit of measuring the crude oil and other petroleum products. It is also unit of volume and 100 to 200 liters oil drum becomes one barrel . Its symbol is bbl.

( d ) Gallon

A gallon is a measure of volume of approximately four litres. In usa, gas is sold on the basis of gallon in small drums.

under google calculator

1 gallon = 3.78 lt . It symbol is gl.

( e ) Cup

The cup is a unit of measurement for volume, used in cooking to measure liquids (fluid measurement) and bulk foods such as granulated sugar (dry measurement) in many countries, although different countries use different sizes.

1 metric cup = 250 millilitres



( f ) Teaspoon

In some countries, a teaspoonful — as much as one teaspoon can hold — is used as a unit of volume, especially in cooking recipes and pharmaceutic prescriptions. It is abbreviated in English as t., ts., tsp. or tspn.For nutritional labeling purposes on food packages in the U.S., the teaspoon is, by Federal regulations, rounded to precisely 5 mL.

( g ) Drop

The drop is a unit of measure of volume, the amount dispensed as one drop from a dropper. It is often used in giving quantities of liquid drugs to patients, and occasionally in cooking.



3. Units of Measurement for Calculation of Area of Product

You would certainly go to marble shop where you would have purchased marble slabs or tiles. The entire product’s price is fixed on the basis of size of marble in square foot which is calculated by multiply length with width.

Like this product all other products like timber wood sheet or iron sheet’s Physical quantity is calculated on the basis of area. Following are the main units of  area measurement:

( a ) Square foot

It is defined as the area of a square with sides of 1 foot (0.333... yards, 12 inches, or 0.3048 metres) in length

( b ) Square inch

Square inch is a unit of measuring area. Its symbol is sq in or sqi.

( c ) Square kilometer

Square kilometre, symbol km2, is a decimal multiple of the SI unit of surface area, the square metre, one of the SI derived units.

( d ) Square mile

The square mile (abbreviated as sq mi and sometimes as mi²) is an imperial and US unit of measure for an area equal to the area of a square of one statute mile.[1] It should not be confused with miles square, which refers to the number of miles on each side squared. For instance, 20 miles square (20×20 miles) is equal to 400 square miles.

 ( e ) Square meter

 ( f ) Square centimeter

 ( g  ) Square millimeter

 ( h ) hectare

 ( i ) Square yard

  ( j ) acre

4. Units of measurement for calculation of length of product

Clothes and other garments are measured in meter. So sale price of clothes is fixed on the basis of total nos. of meter of clothes.

( a ) meter

( b ) centimeter

( c ) kilometer

( d )  foot

( e ) inch

5. Simplest measurement

Some of simplest measurement is piece. A piece means single unit of any product . Suppose, you went to market and buy three copies. It means that you purchased three peice of copy. Its symbol is pc.

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Quote from Prof. S. Raman Dept. of Computer Science and Engg. IIT Madras

10 months ago, I was searching  proformance of business calculation on youtube and found Lecture of Performance Calculation and after watching video, I posted the comment on Prof. S. Raman's video.

Today, I have found quote ( in response ) from Prof. S. Raman Dept. of Computer Science & Engg. IIT Madras.

Dear Prof. Vinod,

First of all, congrats on your work on dissemination of knowledge. Second, I am contacting you on seeing your comments on my Video lecture on Computer Organization, specifically Performance Calculation, on
Youtube. Thanks for your encouraging remarks. You had made the comment 10 months ago, but I saw it very recently, as I was going through Lectures one by one in response to a request for Lecture-wise Exercises. I am currently working on them, and they will shortly be posted on http://www.classle.net/  - another
service-oriented site like yours. I did not want to go public. Hence this note to you.

Thanks again - Raman S

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Solution of Problem Relating Treatment of Advertising Earning in Tally.ERP 9

Problem

I am owner of an Advertising company where I charge people on making adverts on my website, and a couple of LCD TV on malls and bill boards.

How do I use this with tally to do my accounting and all?

Solution

If you are earning from advertising. It means that you are not selling any product. Any earning from advertising will be indirect income. You can give different names of different source of earning.

Then, make ledger account in ledger creation

Online advertising Earning under Indirect Income

LCD TV advertising Earning under Indirect income

Any other Advertising Earning under Indirect Income

Bank (name of bank) account under bank account

After this pass the voucher entry in Accounting vouchers of Tally

Use receipt voucher (F6)

In Receipt voucher

Account: Bank Account

Particular

Write your advertising earning and amount

Accept the voucher.

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Very Good and Helpful Website - Quote from Tanzania Businessman

Dear Vinod Sir,

I am from Tanzania where I am operating my company. First of let me congratulate you for your website. It is very good and very helpful. I have learned many things from your website and using for maintaining the accountings of my company.

From

Ahmed Ghassany

http://www.tanzaniavisitors.com/

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How to Make Security Control in Tally.ERP 9 for Different Users

Sometime a large scale multinational company’s different employees can open Tally.ERP 9 in its office and in branch office by tally.net passwords. Accountant can open tally.erp 9 for data entry purposes, at the time of auditing, Independent Chartered Accountant also looks company accounts in Tally.ERP 9 for auditing purposes and finance manager can watch tally.erp 9’s profit and loss account and balance sheet for financial analysis.

In above situation, if we do not create different password and level of security then following problems may arise.

# First problem: It may possible that any user can change the features or configuration. After this, passing of data entry may be affected from these actions.
# Second problem: It is impossible to determine different users’ responsibility. Suppose, auditor’s duty is to check errors,scandals and frauds in accounting, but if accountant can access without any restriction, he can alter all voucher entries. After this, accountant can not responsible for his errors and mistakes.

For solving these problems, it’s very necessary to all Official authority of accounting and finance department to follow the idea which I have written below. After rough practice on tally, you can understand the following system.

It is the duty of Accounts Manager to set his Security Control user name as administrator and also set other users‘names and passwords.

For creating this he can follow following way in tally.erp 9.

Go to gateway of tally >> company info >> alter >> use security control = yes

After this, he has to make security control of different users and also fix their level. For this following steps will be taken.

Go to tally gateway >> Company info >> security control >> click types of security

In the types of security

Write Accountant and select his basic duty as data entry.

Then disallow him to access

Create/alter: back dated vouchers

You can also set the security level of manager or other users like independent auditors and internal auditor.
After this, press back button and then click users and passwords

Write name of user and set passwords

And accept the form

After this, shut the company and now only users whose names and passwords are given in tally security control can open tally.

Suppose, if you select disallow accountant to create/ alter: back dated vouchers. It means accountant can pass only voucher entries but he can not change the voucher entries after going to day book.
If you have selected disallow auditor to alter features and configuration, then auditor can not change the feature setting of accountant.

Following presentation and video will be helpful for becoming perfect in above concept.

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Who is Accounts Manager?

Accounts manager is the top rank employee who is responsible to manage the accounts of organization in which he is appointed. He also creates links of different departments of organization with accounts department. Accounts manager provides all technical supports in the field of Accounting. He plans the routine work of accounting. He makes organization and staff for delegation of his authorities to subordinate accountants and accounts assistant. All accounting information is prepared by him or his subordinates.

Followings are the main duties of Accounts manager or Manager ( Accounts ):

• To do all Accountant's duties.
• budgeting
• Tax Accounting
• meeting and growing revenue goals for assigned accounts
• planning sales and business development opportunities, including supporting local sales and service teams.

Following chart can give good idea about the duty of Accounts  manager in any organisations.

Pay Scale of Accounts Manager

There are many factors which affects pay scale of accounts manager, but following charts will give you an idea about the annual package of accounts manager both in USA and India.

Pay Scale by Years Experience - Job: Accounts Manager (United States)

Pay Scale by Years Experience - Job: Accounts Manager (India)

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What is Interim Dividend?

Usually, board of directors of company declares dividend in annual general meeting after finding the real net profit position. If boards of directors give dividend for current year before closing of that year, then it is called interim dividend. This dividend is declared between two annual general meetings.

 Before declaring interim dividend, board of directors should estimate the net profit which will be in future. They should also estimate the amount of reserves which will deduct from net profit in profit and loss appropriation account.  If they think that it is sufficient for operating of business after declaring such dividend. They can issue but after completing the year, if profits are less than estimates, then they have to pay the amount of declared dividend. For this, they will have to take loan. Therefore, it is the duty of directors to deliberate with financial consultant before taking this decision.

Accounting treatment of interim dividend in final accounts of company :-

# First Case : Interim dividend is shown both in profit and loss appropriation account and balance sheet , if it is outside the trial balance in given question.

( a) It will go to debit side of profit and loss appropriation account

(b) It will also go to current liabilities head in liabilities side.

# Second Case: Interim dividend is shown only in profit and loss appropriation account, if it is shown in trial balance.

( a) It will go only to debit side of profit and loss appropriation account.

If in final declaration is given outside of trial balance and this will be proposed dividend and interim dividend in trial balance will be deducted for writing proposed dividend in profit and loss appropriation account and balance sheet of company, because if we will not deducted interim dividend, then it will be double  deducted from net profit that is wrong and error shows when we will  match balance sheets assets with liabilities.

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How to Prepare a Balance Sheet of Company

Preparation of balance sheet of company is very necessary, because Indian Company law 1956 gives strict instruction about the format of balance sheet of a company. A company can make balance sheet according to the form given in Part I of schedule VI of company law 1956. A company can also make balance sheet summary form, but it has to attach its schedule in which explanation of different components are given. We are explaining different components of balance sheet of company which will be helpful for students to prepare balance sheet of company.

[* Remember the form of balance sheet under Section 211]

You should remember balance sheet and its all components thoroughly. It can be made either horizontal or vertical form. But total of assets should be equal to total of liabilities. Here, I am explaining these components.

Assets Side of Balance Sheet

Assets are written in right side of company’s balance sheet. In these assets, we include.

1. 
   1. Fixed Assets

     

We will show all fixed assets which are purchased and used in business. This is the long term expenditure of company. In these assets, we will include following.

I)                    Land

II)                  Building

III)                Plant and Machinery

IV)               Furniture and Fixture

V)                 Leasehold assets

VI)               Development of property

VII)             Vehicles

VIII)           Live stocks

IX)                Railway sidings

X)                  Equipments

We also include intangible assets in fixed assets head. Following are the main examples of intangible assets.

I)        Goodwill
II)        Patents
III)      Trade marks and design

Depreciation is charged on every fixed asset except land, because value of land will increase after some time. Here, students are given advice that they should calculate the value of net fixed assets, if different fixed assets are purchased or sold during the year. The following table will be the part of working note.

2.  Treatment of Investment in balance sheet

Investment is outflow of fund for getting interest or dividend earning. So, it is the asset of company and will include in assets side. The following are the main investments.

a)                  Investment in Government or trust securities.

b)                  Investment in Shares, debentures or bonds

The following points must be kept in mind while you are showing investment in balance sheet.

i)                    Investment in fully paid up shares must be shown separately from investment in partly paid up shares.

ii)                   Investment in the form of shares in subsidiary company must be shown separately from investment in any other company.

c)                   Investment in immovable properties.

d)                  Investment in the capital of partnership firms.

Investment will be shown on cost or market value which is less.

3.       Treatment of current assets , loan and advances in balance sheet

A)     Current assets

Current assets will be shown in separate head and following components will be included in it.

i)                    Stock in trade

ii)                   Work in progress

iii)                 Stock of stationary

iv)                 Stock of loose tools

v)                  Stock of stores and spare parts

vi)                 Sundry debtors less provision for doubtful debts

vii)               Cash in hand

viii)              Bank balance

a)      With schedule bank

b)      With other banks

B)      Loan and Advances

The amount which is given by company to others in the form of loan or advances will be shown in asset side. Followings are its main examples.

a)      Advance and loan to subsidiary company

b)      Advance and loan to partnership firm

c)       Bill of exchange / Bill receivables

d)      Advance expenses paid

e)      Outside incomes.

4.       Miscellaneous expenditures

Expenses which are not written off will be shown in asset side of balance sheet. There is no market value of these expenses. Examples are given below.

i)                    Preliminary expenses

ii)                   Commission or brokerage of subscription of shares or debentures

iii)                 Discount allowed on issue or shares and debentures

iv)                 Interest paid out of capital during construction

v)                  Development expenditure

5.       Profit and Loss Account

If company suffers net loss after adjusting all reserves, then it will be shown in asset side. This amount can be also deducted from reserves in liabilities side. That time, we will not show it in asset side.


Liabilities Side of Balance Sheet

Liabilities are written in left side of company’s balance sheet. In these liabilities, we include.

1.       Share Capital

In share capital of company, we have to show authorized capital, subscribed capital, called up capital and paid up capital. For calculating paid up capital, we will deduct calls unpaid and add original paid up amount of forfeited shares.

2.       Reserves and Surplus

Following reserves will be shown in liabilities side of balance sheet of company.

i)                    Capital reserves

ii)                   Share premium account

iii)                 Other reserves

iv)                 Surplus balance in profit and loss account after providing dividend, bonus or reserves.

v)                  Sinking fund

3.       Secured Loan

If any loan is taken by company after keeping any asset as security, then it will be shown in secured loan head. Its detail is given below.

i)                    Debentures

ii)                   Loan and advances from subsidiaries

iii)                 Other loan and advances

iv)                 Interest payable on secured loan

4.       Unsecured loan

Following will be the unsecured loan.

i)                    Fixed deposits of public

ii)                   Short term loans and advances

iii)                 Other loans

5.       Current Liabilities and Provisions

All liabilities which is payable within one year, will be included in current liabilities head.

A) Current Liabilities

i)                    Acceptance or bill payables

ii)                   Sundry creditors

iii)                 Interest payable other than on loan

iv)                 Outstanding expenditures

B)      Provisions

i)                    Provisions for taxations

ii)                   Proposed dividend

iii)                 Provision for provident fund

iv)                 Provision for insurance, pension and other staff benefit schemes

v)                  Other provisions

6.       Contingent liabilities

These types of liabilities will not be shown in balance sheet. But a simple footnote is made for its detail. Following may be the contingent liabilities of company.

i)                    Claims against the company not acknowledge as debts

ii)                   Uncalled liability on shares paid

iii)                 Areas of fixed cumulative dividends

iv)                 Any other contingent liability of company

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