Introduction The Indian Contract Act, 1872 lays down essential conditions for entering into a valid contract. One such requirement is that the parties must be competent to contract. Among those deemed incompetent are persons of unsound mind. Understanding who qualifies as unsound and how their contracts are treated legally is crucial for ensuring fairness and […]
Introduction Accounting is often referred to as the language of business. It involves the systematic recording, reporting, and analysis of financial transactions of a business. Its primary function is to provide accurate and timely financial information that supports decision-making, planning, and control within an organization. Main Body Functions of Accounting 1. Recording Transactions This is
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Introduction Tally is a widely used accounting software in India and abroad, known for its simplicity, flexibility, and robust functionality. It helps businesses manage accounts, inventory, payroll, taxation, and more. Understanding its key components is essential for efficient usage in financial record-keeping and decision-making. Main Body Key Components of Tally 1. Gateway of Tally This
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Introduction A joint venture is a temporary business arrangement where two or more parties come together to undertake a specific project or business activity. Each party contributes resources and shares profits and losses in an agreed ratio. Though often confused with consignment, a joint venture has distinct characteristics and legal implications. Main Body Salient Features
State the salient features of joint venture. Distinguish it from consignment. Read More »
Introduction In accounting, particularly in consignment and branch accounts, the term “loading” refers to the difference between the cost price and the invoice price (or selling price) of goods. It represents the profit margin or markup added to the cost by the consignor or head office. Understanding and computing loading is crucial for accurate accounting
What is loading? How do you compute it? Give examples. Read More »
Introduction The terms “consignment” and “sale” are often used interchangeably in everyday language. However, in accounting and commerce, they have distinct meanings and legal implications. While both involve the transfer of goods, the ownership, risk, and accounting treatment differ significantly. This article explains the differences and clarifies why consignment is not the same as a
“Consignment is the same thing as sale”. Discuss. Read More »
Introduction A hire purchase agreement is a financial arrangement in which a buyer agrees to purchase goods through installment payments. Ownership of the asset is transferred only after the final payment is made. This system is commonly used for acquiring expensive goods such as vehicles, machinery, or electronics, particularly by businesses and individuals who prefer
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Introduction Errors are common in accounting and can occur due to mistakes in recording or posting entries. When errors affect the trial balance, a Suspense Account is temporarily used to balance the accounts until the errors are corrected. This post addresses how to rectify various accounting errors assuming a Suspense Account was opened. Main Body
Rectify the following errors assuming that a Suspense Accounting was opened. Read More »
Introduction Journal entries are the foundation of the accounting process. They are used to record all financial transactions in chronological order, ensuring that every debit has a corresponding credit. The following are journal entries for the given transactions, based on generally accepted accounting principles. Main Body Journal Entries for June 2018 Date Particulars Debit (Rs.)
Introduction Accounting standards are formal guidelines and principles that govern the preparation and presentation of financial statements. They ensure consistency, transparency, and comparability across financial reports. Issued by recognized bodies like the Institute of Chartered Accountants of India (ICAI) or the International Accounting Standards Board (IASB), these standards bring uniformity to financial reporting. Main Body
What are Accounting standards? What is the need of issuing accounting standards? Read More »
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