Question { Accenture, 9458 }

Difference between Provisions and reserves

Answer

Absolutely right my dear friend,

We need to explain the situation to the readers clearly that
when these both are created.

A provision is created when there is an approximately known
reduction (or loss) in value of assets, so that we can
report our assets in balance sheet truly.
(e.g. for reduction in value of assets - prov for
depreciation; the rates are specified in comapanies' act &
it act;
for loss in value of assets - prov for bad debts; management
will decide over the matter)

A reserve is created when we decided to appropriate our
earned profits for some specific purpose. Otherwise they
will remain in general reserve a/c.

Good luck friends.

Question { 5579 }

what is funds flow and what is cash flow?

Answer

Dear friend,

The above said answer is not correct

Cash reported as such in balance sheet always includes cash
equivalents.

You can change the above answer as below
Cash flow mean outgoing and incoming of cash & cash
equivalents in the business; and
fund flow mean outgoing and incoming of all the
components of working capital in the business

Question { IVRCL, 5514 }

any example should cover all three types of account in one
entry

Answer

My dear friend, U asked a rare but good question.

U can find a situation where a fixed asset of Rs. 100000
gross cost (on which Rs. 45000 depreciation was claimed till
year of sale). Hence, its WDV is Rs.55000. Now it is being
sold to Mr.X for Rs.75000.

Entry is:
Mr.X (Personal A/c) Dr. 75000
Accumulated Depreciation (Rep. Personal A/c)Dr. 45000
To Fixed Asset (Real A/c) 100000
To Profit on Sale of Fixed Asset (Nominal A/c) 20000

Readers might be aware that Prefixed or Suffixed nominal a/c
is a representative personal a/c. Hence, Accumulated
Depreciation A/c is considered as Representative Personal A/c.

Question { 7882 }

SHOW CLOSSING STOCK IN TRIAL BALANCE

Answer

Hi friend, please ask question properly. What is your
problem here? Whether it is Why, How or When to show the
closing stock in trial balance?

An entry is required to show the closing stock in TB:
How:
Closing Stock A/c Dr. xxx
To Purchases A/c xxx

Why:
To arrive at the actual cost of goods sold.

When:
when we adopt accrual system of accounting in book.

Here we are to share our problems and progress in our
careers. Hence, i request everybody to ask questions
properly and give answers properly. Best of Luck all the
friends in their careers.

Question { Chartered Accountant, 9250 }

Where will loss appear in Balance Sheet?

Answer

Loss directly has no place in balance sheet.

It will appear in balance sheet only the accumulated balance
in profit & loss a/c is resulting in debit balance.
Then it will appear in right (assets) side under the group
of fictitious assets, below current assets group.

Question { 6076 }

types of accounts and its rules

Answer

Types of accounts
1. Personal,
2. Real,
3. Nominal.

Rules of Accounting:

1. Personal Accounts: Debit the receiver; Credit the giver

2. Real Accounts: Debit what comes in; Credit what goes out

3. Nominal Accounts: Debit expenses & losses; Credit incomes
& gains

Question { 3474 }

plz can some one tel me "The concept of stock holder's
equity and paid in capital".

Answer

Dear friend,
This is the case of books of accounts of a company.

Stockholders equity has 2 components in it, such as
1. the amount brought in as "paid in share capital" (i.e.,
the money brought in by business by selling the shares of
the concerned company", and
2. the amount retained in business by ploughing back profits
earned by business operations (i.e., the amount stood in
"reserves & surplus")

First one is "paid in capital".
And the both constitute "stockholders' equity".