Answer Posted / saurabh goel

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Cash Basis Accounting
Under cash basis accounting revenues are recognized and
earned only when cash is received irrespective of when and
how the services were performed or goods delivered.

To put it in different terms, the cash basis of accounting
asks you to take into consideration all those incomes/gains
that have been received in cash or other assets and
expenses/losses that have been paid out in cash or other
assets during the accounting period in consideration.

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Accrual or Mercantile Basis Accounting
Under accrual or mercantile basis accounting, revenues are
recognized and earned when they are realized or realizable
irrespective of when the cash is received.

To put it in different terms, the accrual basis of
accounting asks you to take into consideration all those
incomes/gains and expenses/losses pertaining to the
accounting period for which you are trying to ascertain the
profits and losses irrespective of whether the incomes are
received in cash or not and the expenses are paid out in
cash or not.

From the following information you are to prepare a Cash Budget for the period from July to December 2008. (i) The estimated sales and expenses are as follows: June July Aug. Sep. Oct. Nov. Dec. Sales 35,000 40,000 40,000 50,000 50,000 60,000 65,000 Purchases 14,000 16,000 17,000 20,000 20,000 25,000 28,000 Wages & Salaries 12,000 14,000 14,000 18,000 18,000 20,000 22,000 Expenses 5,000 6,000 6,000 6,000 7,000 7,000 7,000 Interest Received 2,000 - - 2,000 - - 2,000 Sale of Fixed Assets - - 20,000 - - - - (ii) Sales are 20% in cash and balance on credit. 50% of the debtors are collected in the month of sales and the remaining in the next month. (iii) The time lag in payment of purchases and expenses is 1 month. However, wages and salaries are paid fortnightly with a time lag of 15 days. (iv) The company maintains a minimum cash balance of Rs. 5,000. The cash balance in excess of Rs. 7,000 is invested in government securities in multiples of Rs. 1,000. Short falls in cash balance are made good by borrowing from banks. The interest received as well as paid is to be ignored.

2977

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when apply for ragistred in central excise no

1822

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Dear All, Could any body send me the format of Delivery Challan? What is Even Transfer and Branch Transfer?Please let me know if any body knows? ekathirvel@gmail.com

2386

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Prepare a trial balance from the following :- Particulars Amount Particulars Amount Rs. Rs. Purchases 8225 Premium on lease 1200 Wages 1025 Loan on mortgage 2500 Sales 12450 Plant & machinery 2000 Arun's capital 13500 Provisn for doubtful debts 300 Stock on 1/1/98 1500 Sundry debtors 16550 Salary 410 Trade charges 200 Rent & taxes 162 Bad debts 200 Sundry creditors 2572

2359

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EXPAND_________SCM

2328

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We have two mandatory qualifiers nature of accounts and balancing segment, which will balance the debit and credit and recognize the nature of accounts, my question is what other qualifiers do. Like management. Thank you.

2074

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Can anybody send me Interview questions & Answers to me IN Accounts & finance my Mail ID - virupaksha_krt@rediffmail.com

1999

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recently release the 6.0 version not succede in the market why?

1939

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what is undisclosed profit? explain

2339

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Expand-------URM

1918

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what are the importance accounting entries for AP and AR process in interview..

1611

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in accounts welding institute which category will come for example 1. recruitment con.pvt ltd. is man power recruit category ,so iwant to welding institute (learning welding and fibrication)

2016

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Questions on Purchase Book & sales Book .Balance sheet , Purchase & Sales Return

2452

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What is the Purpose of Preparing Bank Reconciliation Statement?

1992

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Iam selected for final round of interview in IDBI bank for asst. manager post. Can any one help me in knowing what kind of questions will be asked in the interview and how should i prepair?

2154

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