Forums
Rectification of entries
Accountancy
answered on 07-Aug-21 10:31
Difference between error of ommision and compensatory errors
latest answer
These 2 errors are very different yet often confused as the effect on trial balance of both may be same in some cases 1. Error of Omission - Where a transaction as a whole or part is not recorded only(omitted) . now if part omission happens (eg. purchase asset you go to ledger and put the amount in credit side of cashbook but no entry in asset a/c) then trial balance will not tally as credit side will be more , However if the whole transaction is omitted (i.e. No entry at all) then trial balance will tally 2. Compensating Errors- This is basically an error which gets set off due to another accounting error . For example you made a sale of Rs 1000 this was recorded in the books correctly but the amount was recorded as Rs 100 so there is a difference of Rs 900 on credit side , now another transaction of purchase happens of Rs 1000 again same error made of amount recorded as Rs 100 now there will be difference of Rs 900 on debit side as well . When the trial balance is made it will tally as the error amount on debit side and credit side is same . Hence it got compensated. These errors are difficult to locate as the trial balance will tally.
Harshan Pothula
CA Foundation
★ 0
5
842
Bank reconciliation
Accountancy
answered on 07-Aug-21 10:12
On 30/3/20 we have issued cheques of amount of rs.40000 and we have a bank balance of 1lak ..and the cheques got cleared on 25/4/20..my question is in my books of accounts my bank balance will be 1lak-40k or will show my bank balance as per bank statement?
latest answer
We will adjust our books of accounts as per the BRS . So, when the bank balance is reported in the balance sheet it is the reconciled one taken from the adjusted cash book. In this case the amount will be 1 lakh only as the cheque gets cleared on 25/4/20.
vasabattula abhinav
CA Final
★ 85
1
637
Rectification of error
Accountancy
answered on 06-Aug-21 20:51
Explain this rectification
latest answer
When the cheque is received,the entry is Bank a/c dr To man mohan When the cheque got dishonoured, entry (above entry) should be reversed,then Man mohan a/c dr To bank a/c But they had debited sales returns instead of man mohan and hence sales returns to be credited Man mohan a/c dr To sales returns
Bhuvanesh Reddy
CA Inter
★ 7K+
5
767
Advance accounts amalgamation
Accountancy
answered on 06-Aug-21 13:56
While combining the b/s of after amalgamation why dont we merge the free reserve of the selling company? It is also form part of shareholders fund ?please clarify
latest answer
The identity of transferor company's reserves is kept intact in merger method where Share holders holding not less than 90% of the face value of the equity shares of the transferor company become equity shareholders of the transferee company by virtue of the amalgamation. But under purchase method The identity of the transferor company'es reserves except statutory reserves is not kept intact because the same shareholders might not continue
Bhavya Kumar
CA Final
★ 7K+
1
652
Consignment
Accountancy
answered on 06-Aug-21 12:36
In illustration 1, the inventory valuation has no insurance charge. But in the illustration 3, the inventory valuation has insurance. Which one is correct? Should we include the insurance cost or not in the inventory valuation?
latest answer
Ok ok, now I understood. Thank you bro.
Vijay K
CA Inter
★ 9K+
7
854
Postal books
Accountancy
answered on 06-Aug-21 07:30
I have received one postal book which name is " the chartered accountant student monthly guide " from ICAI. I know a little bit about this but could anyone tell me about this book.
latest answer
Thank you brother
Vijay K
CA Inter
★ 9K+
3
751
Depreciation
Accountancy
answered on 06-Aug-21 09:10
Mam/sir CAN you explain what is Amortization. with an laymen's language examples. Y I asked this question means I got confused from others told pls with clear example tell me
latest answer
Amortization is same as like depreciation and the only difference is that amortization is charged on intangible assets while the depreciation is charged on tangible assets. In simple amortization is charged on intangible assets
Balachandar S
CA Inter
★ 59K+
7
774
Financial statements of companies
Accountancy
answered on 05-Aug-21 14:38
Under which category of Equity and liabilities will Retirement gratuity fund appear in the balance sheet ?
latest answer
Thank you so much ma'am
Rithani R.C
CA Inter
★ 4K+
4
662
journal entries
Accountancy
answered on 05-Aug-21 15:47
can we return the goods purchased on cash ? what is the journal entry then ?
latest answer
Cash A/C. Dr. XXXX To purchase return A/c. XXXX
Harshan Pothula
CA Foundation
★ 0
2
776
Consignment
Accountancy
answered on 05-Aug-21 12:38
Can the consignee sells the goods on credit basis and approval or return basis.
latest answer
Thank you, mam
Vijay K
CA Inter
★ 9K+
12
797