Accounting Questions and Answers

Before showing accounting questions and answers, I am sorry again late for answer your accounting questions. I hope, you will pardon me for this. You faith on me and my answers. For this, I am personally thankful to you. Today, leave my all important work and I am giving priority to provide you the solution of your questions. For answers of these questions, sometime, I have taken help from my already contents and added its link when there is need of this.

Moreover, I have done emails to all of you and I sent these answers link in your Facebook id.

Question 1. Functions of management accounting

Gowher from India

Answer : Management accounting is needed for providing useful information to management after accounting analysis. So, whole management accounting department works for analysis of accounting with different tools and then sends report to management. For more, you can read management accounting functions at here.

Question 2. Respected sir/madam

I am Anil Shama. I am working as assistant accountant in any papers pvt ltd. Please kindly requested full knowledge filling e return for TDS, service tax, excise and other. I'm working this firm from only 2 month. My senior accountant explained me but not tell correctly. Please  give me full details this topic.

Anil Sharma from India

Answer : First of all, I want to say that we should faith on our seniors. I do not know what your senior accountant has explained to you. But, I think, a senior accountant can not mislead to junior. Ok, you want to know full knowledge of filling e-return for TDS, service tax, excise and other. Main aim of e-return of TDS, service tax, excise and other is to save time of assessee. In manual return of these taxes, you have to go to different offices physically and for paying tax with challan, you have to go to bank. Now, you no need to go to different offices and bank. For TDS, Income tax office and for excise and service tax, automation of service tax and excise has given simple procedure. From some time ago, I am trying to simplify these procedure in simple hindi for Indian accountant. For this, I have made three video and uploaded in my svtuition youtube channel. Please watch all these videos and study the manual of Govt. of India's official site. Following are these videos.

(A) E-Return of TDS

(B) E-Return of Income Tax

(C) E-Return of Service Tax 

Question 3. Goods in transit but invoice received , journal entry

Rolta India Ltd from India

Answer : No problem dear, your goods will come soon. If you do not pass the entry pass following entry of purchase after seeing the rates and quantity of goods bought on credit from invoice.

Purchase account (Show each item) Account Dr.

Creditor Account (Name of Party ) Account Cr.

When you will get goods and if any item will be rejected, you have to pass the journal entry of return of goods.

Question 4. What are the types of liabilities? what all comes under third party, second party and first party liabilities ?

Sandra from India

Answer : Liabilities are mainly two types. One is long term and second is short term. In long term liabilities, we can include capital, reserves and surplus and long term loan and in short term liabilities, we can include sundry creditors, b/p, bank overdraft and outstanding expenses. It is on you in which category will you write.

Question 5. How to convert rupees to us dollar using Forex exchange in Tally

Sheela from India

Answer : For this, you have to study my this and this written contents. After this, you can ask more explanation.

Question 6. Hello sir my name is Rafi. I am studying MBA final year. plz guide me After MBA which course of accounting to do for earn more money.

Rafi from India

Answer : If you want to earn more money after MBA, it will better, you should start an accounting firm. Only doing accounting business, you can earn more money. If you do not know, how to start accounting firm, you can learn at here.

Question 7. Why is the Trial Balance Step Important and if discrepancies are found between debits and credits what errors will occur?

Mara from Canada

Answer : Mara! Not only trial balance but every thing's steps are important. For example, I am teaching you online. For this, I should know the steps to teach online. If you want to make trial balance, it is must you know the steps to make trial balance and without following this, you will not make correct trial balance. Suppose, one of trial balance step is to know the nature of account before debiting or crediting in trial balance. Suppose, we have to show total sales account's balance in trial balance. If we do not know the nature of this account, we will write this account's balance in the debit side of trial balance. This will become the error of principle. Remember, total sales represent total revenue and all the total revenue will be credit and its balance will be also shown in the credit side of trial balance. If there is difference between debit and credit side of trial balance, it means some mathematical errors which you have to find before making final accounts.

Question 8. I would like to learn manual accounting and busy accounting software 3.9. Please let me know from where I can having coaching and learn the same within one month. 

Arjun Kumar Vij from India

Answer : You can learn all manual accounting from here. Sorry, I still did not use busy accounting software 3.9. I have noted your request in my notebook. Please wait, soon, I will teach you this accounting software, after learning it by myself.

Question 9. Prof. Kumar,

Would you be interested in receiving unique articles of this type on a continuing basis? I can provide you with a regular supply of articles such as "Majority of Local Tax Preparers Are Forced to Compete on Price Rather Than Quality" that are of interest to accountants. All I ask is that you either allow me to include links in the body that point to my site, or a "resource box" identifying me and my site.

Let me know if articles of this type would be of interest to you.


Kirk Ward from USA

Answer : Ok, dear Kirk Ward for your interest in Accounting Education publication section. Soon, I will reply on your offer.

Question 10. Entry of audit fees including service tax, can i use service tax input credit, please
detail accounting treatment with date

audit fees=100000
service tax=10300

Dhananjay from India

Answer : Dhananjay! You have asked good question. Yes, you can use service tax input, if you use services for output services. For example, you take the service of other CA and pays audit fees. Now, you provide same service to other client as output service. At that time, you can get input service tax credit before paying net amount of service tax in Govt. Account. One more condition will apply on manufacturing organisation. If they use service in production, then they get service tax input for paying net excise duty. For more detail, you should learn CENVAT Credit Rule 2004 and its Rule 4 (7). In this, there is clear words,

"Credit of input services can be availed only after the output service provider make payment of value of input service and service tax payable. In other words, payment of only service tax will not do."
Entry will be

If  you have paid audit fees

Audit fees 100000

Service Tax Account 10300

Bank Account 110300

If you are service provider

a) When amount is receivable

Customer Account Dr. 110300

Audit Fees Account Cr. 100000

Service Tax payable Account Cr. 10

b)  Bank Account Dr. 110300

Customer Account Cr. 110300

c) When you will pay service tax

Service Tax payable Account Dr. 10300

Bank Account Cr. 10300

Please read also my previous solution relating to the treatment of service tax at here


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Accounting Education: Accounting Questions and Answers
Accounting Questions and Answers
Accounting Education
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