29Jun, 2021

Complete Tally Prime Tutorial on Trading Organization with GST

Introduction of GST in Trading organization

GST is an Indirect tax levied on whole nation .It stand for goods and service tax.

Types of dealers in GST

There are three types of dealers in GST .

Registered
Compositions
Unregistered

Registered dealers are those who who can claim ITC on the GST paid to your supplier and use the same to offset your output tax liabilities.

Composition dealers does not charge GST under law but has to pay GST as flat rate he will not be able to issue a tax invoice to you.

Unregistered dealer When you purchase from unregistered dealer you will be liable to pay GST under RCM.

GST is divided into three tax slab

IGST
CGST
SGST

IGST when goods are purchased and sale from other state.

Example IGST 18% which means GST 18%

CSGST and SGST when are goods are purchased or sale within the state

Example

CGST 9% SGST 9% which means GST 18%.

GST Mechanism

Create company In Tally prime

Go to gateway of tally > press Alt+K >create
Type the name of the company
Email address and all the information
Select country and state so the tax compliance will be added.
Save the file.

GST compliances on Company

Go to gateway of tally > press Alt+K >F11
Maintain accounts YES
Maintain Inventory YES
Intergrade accounts with inventory YES
Enable goods and service tax (GST) YES
A New widows appear
State :Maharashtra
Registration type :regular
GSTIN/UIN :27AAACB5343E1ZI
Applicable from : 1 april -21
Periodicity : Monthly

As bill wise detail and E-way bill we will see later how to implement that .

Opening balance Trading company in Tally Prime

In the company we already have Closing balance therefore according to that we have to post opening balances in the Tally Prime.

Balance Sheet as on 31 March 2021

Liabilities	Amount	Assets	Amount
Capital A/c	550000	Fixed Asset (as per List)	500000
Bank OD /OCC A/c ICIC bank Loan A/c	100000	Current Asset Closing Stock	100000
Secured Loan Navin Kailash	200000 30000	Sundry Debtors (As per list)	400000
Sundry Creditor (Hindustan ltd)	200000	Cash	150000
(current liabilities) Provision (as per list)	50000	Bank A/c	250000
Unsecured Loan (as per list)	100000	Deposits (as per list)	100000
	1500000		1500000

Closing stock at the end of the balance sheet

List- Provision

S.no	Name	Amount
1	Electricity Bill Payable/c	10,000
2	Office exp payable	10,000
3	Rent Payable	15,000
4	Salary Payable	15,000
		50,000

List- Unsecured Loan

S.no	Name	Amount
1	Komal	30,000
2	Kunal	20000
3	Sandip	25000
4	Payal	25,000
		100,000

List of Fixed Assets

S.no	Name	Amount
1	Computer	100000
2	Printer	25000
3	Motor Vehicles	275000
4	Furniture	100000
		500000

List of Sundry Debtors

S.no	Name	Amount
1	5 star Super Market	25000
2	Apollo Traders	25000
3	Dhanlaxmi Provision	20000
4	Dhruv traders	100000
5	National Distributors	50000
6	JR Foods	22000
7	Modi traders	78000
8	Patel foods	50000
9	Potdar traders	50000

S.no	Name	state	Registration	GSTIN
1	5 star Super Market	MAHARASHTRA	Compositions	27AAACIC1681G1ZP
2	Apollo Traders	Maharashtra	Compositions	27AAACB2100P1ZX
3	Dhanlaxmi Provision	Maharashtra	Regular	27AAACB2902M1ZT
4	Dhruv traders	Maharashtra	Regular	27AABCL5045N1Z8
5	National Distributors	Maharashtra	Regular	27AAACI1195H2ZL
6	JR Foods	Maharashtra	Regular	27AAACC1206D1ZG
7	Modi traders	Maharashtra	Regular	27AAACC1206D1ZG
8	Patel foods	Maharashtra	Unregistered	………………….
9	Potdar traders	Uttarakhand	Regular	05BBEPP1515P1ZI

How to create ledger in Tally Prime:

How to create ledger in Tally Prime:

To create ledger in Tally prime>gateway of tally prime >( Accounting master )create>ledger
In name type the name of ledger and in under (group) select the group)
Opening balance type the amount as specified in ledger
Let the example below

How to create multiple ledgers in Tally Prime:

It means the leger having same group and same nature such as in our case we have fixed asset ,current liabilities debtors etc.

Go to gateway of tally >chart of accounts
From chart of Accounts >ledger > Press ALT+H
Select Multiple Leger
A screen will open
Under group select Fixed assets
Type the name of ledger
Type the opening balance
Save

Similar we can create all the multiple leger as mention in the balance sheet .

Inventory Tally Prime

Means stock/goods generally service sector organization does not maintain inventory .

In trading organization inventory means finished goods as they deal with only finished or final product. In manufacturing organization inventory means semifinished and finished goods .

It is known by name stock item in Tally prime.

Stock Group in Tally Prime

Stock group are head of stock item .It contain information about similar inventory and very helpful in classification of inventory .It can be on the basis of common features ,brand name ,product type etc.

Units in tally Prime

A unit is any standard used for making comparisons in measurements such a unit of Numbers which is specified as Nos is Tally prime ,KG signifies Kilo gram ,Mt signifies meter, bag signifies bag etc

First of all we have create Stock group in Tall Prime.

To create stock group

Go to gateway of tally >create> Inventory masters> Groups.

S.no	Stock Group	under	Can quantities of item to be added	Set alter GST detail
1	Soap	Primary	YES	NO
2	Bath soap	Soap	YES	NO
3	Food	Primary	YES	NO
4	Washing bar	Soap	YES	NO

Now to create group

· Go to gateway of tally >create> Inventory masters> Groups.

· Type the name of the Group > Soap

· Under select > Primary

· Can quantities of item to be added set to YES

· Set alter GST detail set to NO.

See figure below.

Create subgroup with GST rate and and HSN /SAC

Now we need to Create subgroup with GST rate and and HSN /SAC number

This method helps us to define GST rate at Sub group level like product have 18% tax rate and some product have 12% tax rate then set rate at group level.
Under GST all goods and services supplied in India have classified Goods are classified under HSN code and service code .GST rate have been fixed in Five slap namely 0% 5% 12% and 18%.

List of stock group with GST implemented at Group level.

Stock Group	Under	Should quantity be added	Set/alter GST Detail	HSN/SAC	Rate
Hammam	Bath Soap	Yes	Yes	3401	18%
Jam	Food	Yes	Yes	2007	12%
Juice	Food	Yes	Yes	2009	5%
Lux	Bath soap	Yes	Yes	3401	18%
Sauce	Food	Yes	Yes	2103	12%
Tea	Food	Yes	Yes	0902	5%

How to Create subgroup with GST rate implemented.

Go to gateway of Tally prime >inventory Masters >Stock group >
Type Name > Hammam
Under primary > select Bath soap
Should quantity be added >YES
Set GST /alter detail YES
A New screen appears
In HSN //SAC type the code
Taxability>taxable
Integrated tax > 18%
Save

Similarly creates another group in Tally prime as mentioned in list.

Unit of measurement in Tally Prime

Now We need to create unit of measurement in our case its Nos

How to create Unit of measurement in Tally Prime

Go to gateway of tally> Inventory >Create
Select >Units
Type>simple
Symbol>nos
Formal Name: Numbers
Unit quantity code (UQC)>NOS-Number
Number of decimal places >0

To create location or godown Tally Prime

After creating Nos next thing is to set location /godown of the business where goods are to be placed.

To create location or godown
Go to gateway of Tally>Inventory master
Select location >alter existing location which is by default main location
Delete main location
Type >Shop

A new location shop is created similarly create another location warehouse.

Warehouse location is to created not alter.

List of Stock item in Tally Prime

Create stock item List in tally Prime

To create stock Item in tally prime

Go to gateway of tally>Inventory master>Stock Item>create
A new window appears
In name Type >hammam 100 gm
Under > hammam
Unit >Nos
Set standard rate yes a window appear
In applicable from Type the date 1/4/21 and in rate standard cost 16
Type the date 1/4/21 and in rate standard selling cost 18
Now in opening opening balance type 69 a new window appears
Select shop quantity 30 rate 18
Similarly select warehouse quantity 39 rate 18

Note :

Press F12 to check configuration select use group for stock item yes
Provide opening balance for stock item :Yes
Provide Unit of measurement of stock item Yes

Now create all other stock item in similar way after creating group as mention above.

Stock summary in tally prime

After creating all the inventory in tally prime similary next is to see stock summary

To see stock summary there is new feature in tally prime which i

Go to gateway of Tally> Alt+G > show stock summary

Press Alt+f1 for detail reporting

A window will appear

Tax Rate Setup in Tally Prime GST

Now to see the tax rate setup go to gateway of tally >GST reports >GST rate setup>Alt +F1 for detail a new window will appear

As shown here

Accounting voucher Key in Tally Prime

Voucher and function Key	Use for
Contra Voucher (F4)	a)Cash deposited in Bank b)Cash withdrawal from Bank c)Cash/Cheque Transferred one bank to Another Bank d)Cash Transfer from Main Cashier to Petty Cashier
Payment Voucher (F5)	a)Paid loan by cheque or cash b)Paid to Supplier /Sundry creditor by cheque or cash c)Paid direct /Indirect expense by cheque /Cash d)Purchase Assets by Cheque or Cash e)Fixed Assets purchase by cheque or Cash f)Any type of payment made by cheque or cash
Receipt Voucher (F6)	a)Received personal Loan by cheque or cash b)Received cheque or cash from Customer /Sundry Debtor c)Received direct /Indirect income by Cheque or Cash d)Any Type of income received by Cheque or Cash e)Fixed Assets Sold by Cash by Cheque f)Any Type of amount received by cheque or cash
Journal Voucher (F7)	a)Depreciation entries b)Prepaid exp adjustment entries c)Provision entries d)Outstanding /payable exp Adjustment entries e)Any type of adjustment entries f)Fixed asset purchase /Sold on credit
Sales Voucher (F8)	a)Goods sold on Credit sales b)Goods sold in Cash c)Goods sold by Cheque
Purchase Voucher (F9)	a)Goods purchase on Credit b)Goods purchase in Cash c)Goods purchase by cheque
Date change F2	Date Change

Accounting voucher Key in Tally Prime

Go to Gateway of Tally >Vouchers>press key any key to create voucher entry

Maintain Bill Wise Detail In Tally Prime

Maintain Bill Wise detail is made in Tally Prime for maintaining outstanding and Pending bill of Sundry creditors and debtors

How to create bill wise detail in Tally Prime

Go to the gateway of tally >Alt +K >F11
Set enable Bill wise Entry >YES

as shown in figure

Now alter the ledger of the party

Go to gateway of Tally Prime>Alter>Ledger

Select Appolo Trader

Maintain Balance Bill by bill set to YES

Default credit period: 10 days

Check the credit days during voucher entry YES

Similarly alter ledger of following parties and give credit days

Name of Party	Credit days
Dhanlaxmi Provision	25 days
Dhruv traders	27 days
National Distributors	28 days

Also, Alter Hindustan Ltd and set Maintain bill wise detail Set to YES

Now create Ledger of Purchase

Gateway of Tally >create >Ledger
Name :Purchase
Under :Purchase
Type of Ledger : Not Applicable
Is GST applicable >Applicable
Set /Alter GST detail :NO
Type of Supply :Goods
Opening Balance :skip the filed
press Y or enter to Accept the screen.as figure shown belwo

Ledger Input CGST and Input SGST

To create a ledger of Input CGST

Go to the gateway of tally > Create> Ledger
Name : Input CGST
Under Duties and taxes
Type of Duties: Central Tax
percentage of calculation :0%
Rounding method not applicable
Press Yes to save

To create a ledger of Input SGST

Go to the gateway of tally > Create> Ledger
Name : Input SGST
Under Duties and taxes
Type of Duties: state Tax
percentage of calculation :0%
Rounding method not applicable
Press Yes to save

Make a transaction in Purchase Voucher.

Note: Alter Hindustan Ltd and set maintain bill by bill to YES.

Go to Gateway of Tally >vouchers >
Press F9 purchase Voucher press CTRL +H and select Item invoice mode
Supplier invoice number HU01
Date:1/5/2021
Party Name: Hindustan Lts A/c
Purchase Ledger: Purchase A/c
Name of item: Taj Mahal Tea 250 Gm
Godown: Warehouse
Quantity:80
Rate:80 Automatically
comes

24Jun, 2021

How to make Journal entry for interest on drawing

22Jun, 2021

Complete HTML coding for kids chapter 2

HTML FORMS

In Html form Tag is used to create or design a simple form under body element. It has a certain facility to put data with an interactive layout.
It has buttons and several fields which has fields such as input text box Input Password box, input radio button select box message text area, and so on.
Labels tag are names of form to be designed in the form of the tag.

Form Coding in HTML

<label>Password</label> <input type=”password” name=”” /> <br><br>
<label>Gender</label> <input type=”radio” name=”gender” id=”male” /><label for=”male”>Male</label>
<input type=”radio” name=”gender” id=”female”><label for=”female”>Female</label> <br><br>
<label>Hobbies</label> <input type=”checkbox” name=”hobby” id=”music” />
<label for=”music”>Music</label> <input type=”checkbox” name=”hobby” id=”football”><label for=”football”>Football</label> <br><br>

<label>Message</label> <textarea rows=”10″ cols=”60″>type your message</textarea> <br><br>
</form>
</body>
</html>

Form is designed under <body>…</body> tag with <form>…</form> tag

Labels are the name of the form to be desplay in page .It is to be under <label>…</label>tag

Input type is the type of data in the form to be interacted. such as

<input type=”text”> which is used for name or any such similar field.

it is used for password to be given by user.

<input type=”radio”> it us used for radio button to be clicked by the user

checkbox is given to select the box from the list .

<br> tag is given to give break between lines so each form field shows on different line.

name=”” is given specify the name of the input type and id to make it unique.

Iframe tag

The iframe in HTML stands for Inline Frame. The ” iframe ” tag defines a rectangular region within the document in which the browser can display a separate document, including scrollbars and borders. An inline frame is used to embed another document within the current HTML document.

<html>
<head>
<title>Iframe Tag</title>
</head>

<body>
<iframe src=”https://www.thevistaacademy.com/” align=”left” frameborder=”1″ width=”500px” height=”500px”></iframe>

</body>
</html>

Font properties in HTML

We will know about three properties in the Font tag .
color
size
face
<html>
<head>
<title>First Web Page</title>
</head>
<body>
<h1><font color=”red” size=”7″ face=”arial,verdana”>this heading 1</font></h1>
<h2><font color=”green” size=”6″ face=”arial,verdana”>this heading 2</font></h2>
<h3><font color=”blue” size=”5″ face=”arial,verdana”>this heading 3</font></h3>
<h4><font color=”purple” size=”4″ face=”arial,verdana”>this heading 4</font></h4>
<h5><font color=”#fd521e” size=”3″ face=”arial,verdana”>this heading 5</font></h5>
<h6><font color=”#be2276″ size=”2″ face=”arial,verdana”>this heading 6</font></h6>

</body>
</html>

this tag is used to embaded video in HTML from the loacation where u have video file .

we have to know the extention of the video in this code we are usign mp4 video to show a embaded video to run on browser.

<html>
<head>
<title>Video Tag</title>
</head>

<body>
<video controls >
<source src=”peace.mp4″ type=”video/mp4″ />
</video>
</body>
</html>

Compete HTML Tutorial part 2

10Jun, 2021

Salary outstanding journal entry in Accounting

What is salary?

Salary is an expense for the business. It is to pay to an employee in exchange for services taken from him.

When salary is not paid on time its becomes outstanding therefore it needs to show in the balance sheet as it is now a liability for the firm.

now when salary is paid on time its an expense an we have to make journal entry

Salary A/ dr	Xxxx
To cash / Bank A/c	Xxxx
Being salary paid

Rules follow when salary is paid .

Salary A/	Dr all expenses and losses Salary is expense by nature
cash A/c	Cr what goes out Cash is real accounts by nature
Bank A/c	Cr. The giver and bank is giver in this case.

Outstanding salary journal entry

Journal entry for salary outstanding

What is an outstanding salary?

An outstanding salary is a salary due or not paid.

outstanding salary is a liability for the business, therefore, it is shown on the liability side of the balance sheet.

The rule for assets and liability

Accounts	ADD	Deduct
Assets	Debit	Credit
Liability	Credit	Debit

it means + Assets in business we have to debit it.
When we have credit assets then we have to deduct – it from the business.
It means that when we have to Add means + liability in business we have credited it.
When we have Debit Liability then we have to deduct – it from the business.

Outstanding expense journal entry example

Suppose salary to be paid Rs 10000 but not paid the salary.

here our due date of payment of salary has arrived but the salary is not paid therefore we have shown our liability which is the outstanding salary in the books of Accounts.

Journal entry will be .

Salary A/c	10,000
To Outstanding Salary A/c	10,000
Being salary not paid on due date.

Salary A/

Salary is expense and Dr all expense and losses

Nominal Accounts

Outstanding salary

Outstanding salary is a liability and we are Increasing our liability therefore credit O/S

Salary.

When outstanding salary is paid

Outstanding salary in Profit and Loss Accounts

Note: only when outstanding salary not paid.

If outstanding salary not paid then it will be shown on the debit side of Profit and loss and loss accounts as it occurs in the current year and expense of this year not paid.

Particular	Amount	Particular	Amount
Outstanding salary	10000

Outstanding salary in balance sheet

outstanding salary is liability by nature, therefore, it is shown in the liability side of the balance sheet.

Liabilty	Amount	Assets	Amount
Outstanding salary	10000

Understand the outstanding salary with an example

January

Salary paid for the month Rs 5,000 actual salary Rs 10,000.

February

Salary paid for the month with adjustment of last month salary.

Solution:
January

Note : Salary paid for the month is Rs 10,000 but we are paying only Rs 10,000 therefore Rs 5000 is salary payable or outstanding salary.

Journal entry for the same will be .

Salary A/c	10,000
To Cash A/c	5000
To outstanding salary /Salary payable A/c	5000
(being salary paid and salary payable

Adjustment of Outstanding salary

February

In February we need to adjust the salary of January therefore we have to pay more cash in February as we pay less in January .

Journal entry for the same will be .

Salary A/c	10,000
Outstanding salary /Salary payable A/c	5000
To cash A/c	15000
(being salary paid and salary payable adjusted

When outstanding salary is paid

Adjustment of Outstanding salary

Now when we pay our outstanding salary then we have to make a new journal entry to deduct our liability which is on books with the name Outstanding salary.

Journal entry will be .

Outstanding Salary A/	10,000
To cash A/c	10000
Being outstanding salary paid

Outstanding salary in Trial Balance

If outstanding Salary is given in the trial balance.

Suppose if the outstanding salary is given in the Trial balance.

Example.

Trial Balance

Particular	Amount	Amount
Outstanding salary		xxxxx

If outstanding salary is given in the balance sheet under such condition it will be shown only in the balace sheet .It means it already adjusted .

Outstanding salary FAQ

Oustanding salary is under which account?

Answer: Outstanding salary is a personal representative account. As per the matching concept, salary is due but not yet paid. So, Unpaid salary to be shown as liability under ‘Expenses Payable’ or ‘Salary Payable’ in the Balance sheet on liabilities side and on another aspect of dual entry to be placed in Profit & Loss Account.

Where Outstanding Salary appearing in Trial Balance are shown:

Answer: On the liability side of the balance sheet.Its means its already adjusted no need to shown in Profit and loss Accounts.

What is the definition of outstanding salary?

Outstanding salaries are salaries that are due and have not yet been paid.

For example, the staff of Amar Traders has worked for the month of April.
It is now the 3rd of May and they still have not been paid,
so the salaries are “payable” or “owing” or “outstanding” (all the same thing) .

Complete Introduction to Microsoft Power BI

Outstanding salary vs prepaid Salary

the difference between outstanding salary and prepaid salary in a table:

Criteria	Outstanding Salary	Prepaid Salary
Definition	Unpaid wages/salaries for completed work	Advance payment for anticipated work
Financial Statement	Liability	Asset
Nature	Money owed to employees	Money owed to the company (from employees)
Occurrence	After work is performed	Before work is performed
Adjustment Requirement	Decreases profit (expense) on the P&L	Increases profit (revenue) on the P&L
Treatment in Accounts	Shown as a liability in the balance sheet	Shown as an asset in the balance sheet

It’s essential for businesses to keep track of both outstanding and prepaid salary to ensure accurate financial reporting and proper cash flow management.

Unfortunately, this quiz has a limited amount of entries it can recieve and has already reached that limit.

10Jun, 2021

What are Margin in CSS cascading style sheet :

Margin property in CSS is used to make the gab between two border property in CSS. It is very usable property in CSS.

Margin can be :
Margin-top:10px;
Margin-right:10px;
Margin-:bottom:10px;
Margin-left:10px;

Margin property in CSS work in anti clock wise direction and its short hand is very easy:

Margin :10px 10px 20px 20px ;

Which starts from top right bottom left;

Similarly, if we want to fixed the same margin in all side then the short hand is

Margin:10px;

There is one property of margin which is auto it is used to put the div in center.

Margin can be :
Margin-top:10px;
Margin-right:10px;
Margin-:bottom:10px;
Margin-left:10px;

Note we have to use width property with margin to run it.

example for margin in CSs

What are Margin in CSS cascading style sheet :

<html>

<head>

<title>Form Tags</title>

<style>

#first {

border:2px solid green;

margin:20px;

}

#two1{

border:5px solid red;

margin-left:30px;

}

</style>

</head>

<body>

<div id =”first”>this is margin property in CSS where we have to create a div and border and to give gap between two div can be given in all side or in top right bottom left

</div>

<div id =”two1″>this is margin property in CSS where we have to create a div and border and to give gap between two

</div>

</body>

</html>

In the above example we have given two example to use the program in two div with different margin property on the border and we can see the difference

Margin in CSS with width

3Jun, 2021

Journal Entry of Bill of Exchange in Accounting

Example

Bills of Exchange Journal Entries

On 1 may 2015 Mr A sold of goods to Mr B for 50000 on Credit. Mr B ask for 3 month time .Mr A ask for security .Mr B say he ready to sign any document you like as security.Mr A on White paper an write following phrase.

“Pay to in the order of Mr. A rs 50000 3 month after the date.

He also write date and place of preparing th e bill signature on the paper.

Mr a send this paper and asked him sign on the revenue stamp. Mr b sign on the revenue stamp and writes the word accepted across the face of the bill.Paper now become valuable document called as bills of exchange.Mr A keeps the bills with him for next 3 month after that he goes to Mr B ask for payment.

Points to remember

Mr A is called as drawer of the bill.
Mr B is called as drawee of the bill.
Bill is an asset.

When A sold on credit to B Rs. 50000

BOOKS OF A		BOOKS OF B
B Dr.	Xxxx	Purchase A/c Dr.	Xxxx
To sales A/c	Xxxx	To A	Xxxxx
Being goods sold to B		Being goods purchased from A

When A draws a bills on B

BOOKS OF A		BOOKS OF B
Bills Receivable A/c	Xxxx	A	Xxxx
To B	Xxxx	To Bills Payable A/c	Xxxxx
Being bill to received		Being being bill to paid

After 3 month Mr. A goes to Mr B and take payment. Mr. B honors the bills

BOOKS OF A		BOOKS OF B
Cash A/c	Xxxx	Bills payable a/c	Xxxx
To Bills Receivable A/c	Xxxx	To Cash A/c	Xxxxx
Being cash received		Being cash paid

Journal entry of endorsement of Bill

Ram sold goods on credit Rs 50000 to Rahim On 1 april2014.Out of these goods Rahim sold some of the goods to on credit to Rajiv. Rs 50000.Rahim Drew a Bill on Rajiv for 50000 on the same day.Rajiv accepted it and return it to Rahim. On 4 may 2014 when Ram demanded payment Rahim endorsed the in favor of Ram.

Endorsement

Rahim is called as the endorser
Ram is called as the endorsee.

On the due date Rajiv honored the bill.

Ram sold goods on Credit to Rahim,

RAM BOOKS

RAHIM BOOKS

RAJIV BOOKS

Rahim A/c

To sales

Xxx

xxx

Purchase A/c

To Ram

Xxxx

xxxx

NO Entry

Being goods sold to Rahim

Being goods purchased from Ram

When Rahim sold goods to Rajiv

RAM BOOKS

RAHIM BOOKS

RAJIV BOOKS

No Entry

Rajiv

To sales

Xxxx

xxxx

Purchase A/C

To Rahim

xxxx

being goods sold to Rajiv

Being goods purchased from Rahim

When Rahim drew a bill on Rajiv

RAM BOOKS

RAHIM BOOKS

RAJIV BOOKS

No Entry

B/R a/c

To Rajiv

Xxxx

xxxx

Rahim A/C

To B/P A/c

Xxx

xxxx

Being bill receivable from Rajeev

Being bill payable to Rahim

When Rahim endorsed the bill in Favor of Ram

RAM BOOKS

RAHIM BOOKS

RAJIV BOOKS

B/R

To Rahim

Xxxx

xxxx

Ram A/c

B/R

Xxxx

xxxx

No entry

Xxx

xxxx

being bill endorse to Ram

On 4 may 2014 Rajiv Honors the bill

RAM BOOKS

RAHIM BOOKS

RAJIV BOOKS

Cash A/c

To B/R

Xxxx

xxxx

No Entry

Bills Payable A/c

To cash A/c

Xxx

xxxx

Being cash received

Being cash paid

Mr A sold goods on credit to B 1 April 2014 on the same day A drew a 3 month bill and A accepted it and return it.On 4 May 2014 A was in urgent requirement of money he approached bank and discounted the bill. Bank discounted the bill and charge a discounting @ 12% pa.

When A sold goods on credit to B

A Books

B

To sales

(being goods sold to B)

B Books

Purchase A/c

To A

(being goods purchased from A)

When A drew a bill on B

A Book

B/R A/c

To B

B Books
A
To B/P

When A Discounted the bill

A Books

Bank A/c

Discount A/c

To B/R

B Book

No Entry

4 July 2014 when B honors the bills

A Books

No Entry

B Books

B/P A/c Dr

To Bank A/c

3Jun, 2021

Journal Entry of Loss or profit on Sale of Asset in Accounting

Journal Entry of Loss or profit on Sale of Asset in Accounting

Sometime business need to sale their Fixed assets .Before we go further, we have to understand that what are Fixed Assets .

Fixed Assets : Fixed assets are the long-term tangible assets that are used by business in generating income. Example Land and building ,plant and Machinery furniture and fixture.

When we sale these assets it effects our Balance sheet Asset side as these assets are going out of business and in exchange of that either we increase our bank accounts or Cash accounts or either purchase new assets. Under such condition we sometime make profit or either loss.

The disposal of assets involves eliminating assets from the accounting records.

When a fixed asset or plant asset is sold, there are several things that must take place:

The fixed asset’s depreciation expense must be recorded up to the date of the sale
The fixed asset’s cost and the updated accumulated depreciation must be removed
The cash received must be recorded
The difference between the amounts removed in 2. and the cash received in 3. is recorded as a gain or loss on the sale of the fixed assets

When Loss is made on sale of Fixed Assets

Journal entry for loss on sale of Asset

Lets under stand its with example .

Sold Machinery (fixed Assets) book Value Rs 100000 for Rs 90,000 .

Note here the asset which we have in books have value Rs 100000 but we sold it for Rs 90,000 therefore we make a loss of Rs 10000 here hence we have to show that loss in the books of accounts .

To make the journal entry of the same in the books

Profit and loss Accounts	10,000
Cash A/c	90,000
To Machinery	100000
Being Machinery sold

Profit and loss Accounts	Debited	Nominal Accounts- expense or loss by nature
Cash A/c	Debited	Real Account -What comes in
Machinery	Credited	Real Account- What goes out out

Therefore, now this loss on sale of asset to be shown in the Profit and loss account and shown in the debit side

Particular Dr	Amount	Particular Cr	Amount
To loss on sale of Asset	10,000

Whereas in Balance Sheet In asset side a cash account will increase and Fixed asset machinery a/c will decrease .

When profit is made on sale of Fixed Assets

Sold Machinery (fixed Assets) book Value Rs 100000 for Rs 110,000 .

Note here the asset which we have in books have value Rs 100000 but we sold it for Rs 110,000 therefore we make a profit of Rs 10000 here hence we have to show that Profit in the books of accounts .

To make the journal entry of the same in the books

Cash A/c	110,000
To Profit and loss Accounts	10,000
To Machinery	100000
Being Machinery sold

Profit and loss Accounts	credited	Nominal Accounts – profit or Income by nature
Cash A/c	Debited	Real Account- What comes in
Machinery	Credited	Real Account -what goes out out

Therefore, now this loss on sale of asset to be shown in the Profit and loss account and shown in the credit side

Particular	Amount	Particular	Amount
		To Profit on sale of Asset	10,000

Whereas in Balance Sheet In asset a cash account will increase and Fixed asset machinery will decrease .

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