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brokerage on quoted price = investment accounting
Accountancy
purchased ₹120 cum intrest (117₹ deb + ₹3int) sold ₹105 ex intrest (₹105deb + ₹2int) why is brokerage paid on quoted price and not after calculating intrest ? it may happen that to avoid paying brokerage on interest, it can b quoted in ex intrest
Answers (14)
Rule1: To decide whether to apply brokerage on ex interest or cum interest, apply based on information given in question Eg: brokerage 10%on cum interest. If nothing information about whether to apply brokerage on ex interest or cum interest given in question, then we generally apply on cum interest because it is the value at which transaction taken place
Krishnan K
Rule1: To decide whether to apply brokerage on ex interest or cum interest, apply based on information given in question Eg: brokerage 10%on cum interest. If nothing information about whether to apply brokerage on ex interest or cum interest given in question, then we generally apply on cum interest because it is the value at which transaction taken place
transaction takes place in debenture value + intrest....even at cum int or ex int
Krishnan K
The buyer always pays interest
The buyer always pays interest irrespective of whether it is cum interest or ex interest. It is just a way of expression It is like GST Eg. Price of tv : 5000(ex GST) GST :300 Total 5300 ( cum GST) The buyer always pays gst . Cum interest or ex interest, it is just a way of expression I think you have understood?
Krishnan K
The buyer always pays interest irrespective of whether it is cum interest or ex interest. It is just a way of expression It is like GST Eg. Price of tv : 5000(ex GST) GST :300 Total 5300 ( cum GST) The buyer always pays gst . Cum interest or ex interest, it is just a way of expression I think you have understood?
The price paid by the buyer of TV 5300 will not change.he always pays gat .it is the transaction value .hence any brokerage calculated generally on transaction value ie 5300
Krishnan K
The buyer always pays interest irrespective of whether it is cum interest or ex interest. It is just a way of expression It is like GST Eg. Price of tv : 5000(ex GST) GST :300 Total 5300 ( cum GST) The buyer always pays gst . Cum interest or ex interest, it is just a way of expression I think you have understood?
sorry my query ws diff..it ws about brokerage i meant why brokerage charged on the intrest amount if it's cum intrest and not on ex intrest even though buyer always pays intrest in both the cases
Thread Starter
Sushmita Chowdhuryedit = sold deb ₹110 cum intrest (₹105 deb + ₹5 intrest) sold deb ₹120 ex intrest (120₹ deb + ₹1 intrest) brokerage 2% why is brokerage paid on cum int & not on ex intrest, even though intrest is received on both cases
in this brokerage is charged on ₹5 intrest but not on ₹1 intrest even though buyer have to pay that intrest in both the cases
Thread Starter
Sushmita Chowdhuryin this brokerage is charged on ₹5 intrest but not on ₹1 intrest even though buyer have to pay that intrest in both the cases
Brokerage is paid by both seller and buyer during sale and purchase transaction. Here, brokerage charged on on rs.1 also. But if question says brokerage calculated on ex interest.then brokerage is calculated on only principal amount and not on that interest (rs.1). Conclusion: If question says nothing , apply brokerage on cum interest price If question says where to apply , must follow accordingly
Krishnan K
Brokerage is paid by both seller and buyer during sale and purchase transaction. Here, brokerage charged on on rs.1 also. But if question says brokerage calculated on ex interest.then brokerage is calculated on only principal amount and not on that interest (rs.1). Conclusion: If question says nothing , apply brokerage on cum interest price If question says where to apply , must follow accordingly
brokerage for all transactions 2% say but we do 2% x 120 not 121 likewise 110x2% brokerage why not on 121₹
Thread Starter
Sushmita Chowdhurybrokerage for all transactions 2% say but we do 2% x 120 not 121 likewise 110x2% brokerage why not on 121₹
Calculate brokerage on Rs .121 and not on 120
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