AccountingQA Latest Questions

AbhishekBatabyal
AbhishekBatabyalHelpful
In: >

  2. Ayushi Curious Pursuing CA

    By the name, it can be easily deduced that Advance tax means the tax paid in advance. Advance tax is the tax paid by an assessee in the Previous Year itself based on his estimated income. We know that Income tax liability is known in the Assessment Year based on the income of the Previous Year. But,Read more

    By the name, it can be easily deduced that Advance tax means the tax paid in advance.

    Advance tax is the tax paid by an assessee in the Previous Year itself based on his estimated income.

    We know that Income tax liability is known in the Assessment Year based on the income of the Previous Year. But, the government encourages the taxpayers to pay the tax in the Previous Year itself based on the estimated income.

    As per section 208 of the Income Tax 1961, if the total income liability on the estimated income comes up more than Rs. 10,000, then advance tax has to be paid.

    The advance tax has to be paid according to the following schedule for the individual and corporate assessees [Other than the assessee who computing profits on a presumptive basis under section 44AD(1) and 44ADA(1)]:

    Due date of Instalment Amount Payable
    On or before 15th June No less than 15% advance tax liability.
    On or before 15th September No less than 45% of tax liability, as reduced by any amount if any paid in the earlier instalment.
    On or before 15th December No less than 75% of tax liability, as reduced by any amount or amounts if any paid in the earlier instalments.
    On or before 15th March No less than 100% of tax liability, as reduced by any amount or amounts if any paid in the earlier instalments.

     

    Any amount paid by the way of advance tax on or before 15th March shall be treated as advance tax paid during each financial year on or before 15th March.

    Also as per section 219, the tax credit is given for the advance tax paid in the regular assessment of income tax.

    In case of non-payment or short payment of the advance tax,  interest is payable as per section 234B. Interest is also attracted in case of delayed payment of advance tax as per section 234C.

    That’s all, I would conclude my answer hoping that it was helpful in making the concept of advance tax easy to grasp.

    See less
    • 0
Ishika Pandey
Ishika PandeyCurious
In: >

  2. SidharthBadlani CA Inter Student
    This answer was edited.

    Yes, accounting is necessary even for not-for-profit organizations. NPOs or not-for-profit organizations are those that are created for the welfare of the society. They intend to advance some social cause. For example charities, orphanages etc Accounting for NPOs becomes necessary as the trustees ofRead more

    Yes, accounting is necessary even for not-for-profit organizations.

    NPOs or not-for-profit organizations are those that are created for the welfare of the society. They intend to advance some social cause. For example charities, orphanages etc

    Accounting for NPOs becomes necessary as the trustees of these institutions are liable to their members, the donors and the government. They discharge this function with documenting activities of the institution.

     

    What is a not-for-profit organization?

    A not-for-profit organization is an entity that undertakes charitable activities. These institutions do not have earning profit as their primary motive. Their focus is on extending social welfare.

    Every not-for-profit organization usually has a group of trustees that are responsible for handling all its operations. These trustees are accountable to the members of the NPO.

    A not-for-profit organization usually relies on donations and grants as its primary source of revenue. They do not charge the stakeholders to whom they extend their services or goods.

     

    What does accounting for Not-for-profit organizations entail

    The professionals undertaking accounting of not-for-profit organizations must have a significant knowledge of statutory provisions and accounting principles. Here is a brief overview of what accounting for a not-for-profit organizations entails

    • Ensuring that the institution fulfills all the legal compliances necessary for it to continue functioning as a NPO.
    • Documenting all the activities of the institution and ensuring that the NPO has the necessary permits to carry out those activities.
    • Accounting for all the revenue receipts and expenses of the institution. The professional must keep in mind that the interests of the members and other stakeholders are not being subjected to any prejudice.
    • In India, every NPO has to compulsorily prepare a receipt and payment account, income and expenditure account and a balance sheet. These have to be submitted to the Registrar of Societies before the due dates.

    • Every professional undertaking the accounting of a not-for-profit organization must keep in mind that a single non-compliance or partial-compliance can result in the NPO losing out on its tax-exempt status.
    • In the past there have been many instances when NPOs have been used for the purpose of money laundering or tax evasion.
    • This has resulted in the government making the compliances for these institutions more stringent. The institutions are now required to be more transparent regarding their operations.

    We can conclude that accounting is an indispensable requirements for not-for-profit organizations to be able to continue their operations and claim the statutory benefits that the government has extended to them.

     

     

    See less
    • 0
Karan
Karan
In: >

  2. Ayushi Curious Pursuing CA
    This answer was edited.

    Let’s understand what a cashbook is: A petty cash book is a cash book maintained to record petty expenses. By petty expenses, we mean small or minute expenses for which the payment is made in coins or a few notes like tea or coffee expense, bus or taxi fare, stationery expense etc. Such expenses areRead more

    Let’s understand what a cashbook is:

    • A petty cash book is a cash book maintained to record petty expenses.
    • By petty expenses, we mean small or minute expenses for which the payment is made in coins or a few notes like tea or coffee expense, bus or taxi fare, stationery expense etc.
    • Such expenses are numerous in a day for a business and to account for such small expenses along with major bank and cash transactions may create an extra hassle for the chief cashier of a business.
    • So, the cash is allocated for petty expenses and a petty cashier is appointed and the task of recording the petty expenses in the petty cashbook is delegated to him.

    The manner in which entries are made

    When cash is given to the petty cashier, entry is made on the debit side and in the petty cashbook and credit entry in the general cashbook.

    Entries for all the expenses are made on the credit side.

    Generally, the petty cashbook is prepared as per the Imprest system. As per the Imprest system, the petty expenses for a period (month or week) are estimated and a fixed amount is given to the petty cashier to spend for that period.

    At the end of the period, the petty cashier sends the details to the chief cashier and he is reimbursed the amount spent. In this way, the debit balance of the petty cashbook always remains the same.

    Format and items which appear in the petty cashbook

    The format of the petty cashbook depends upon the type of petty cash book is prepared and the items appearing in it are nothing but petty expenses. Let’s see an example:-

    A business incurred the following petty expenses for the month of April:-

    1. Stamp – Rs. 10
    2. Postage – Rs. 50
    3. Cartage- Rs. 100
    4. Telephone expense – Rs. 500
    5. Refreshments – Rs. 250

    Now we will prepare two types of cashbooks:

    • Ordinary Petty Cashbook:

    Here, the Petty cash book is of the same format as the general cash book.

    The cash allocated for petty expenses is recorded on the debit side of the petty cash book and on the credit side of the general cash book.

    • Analytical Petty Cashbook

    Here, there are separate amount columns for each type of expense. As the name suggests, this type of petty cashbook helps to analyse the petty cash spending on basis of the type of expense.

    See less
    • 0
Bonnie
BonnieCurious
In: >

  2. GautamSaxena Curious .
    This answer was edited.

    Bills Payable Book Bills payable book, also known as a B/P book is a subsidiary or secondary book of account in which transactions relating to bills of exchange are recorded. It includes the recording of bills that are payable by a business. In a business where the number of bills exchanging hands iRead more

    Bills Payable Book

    Bills payable book, also known as a B/P book is a subsidiary or secondary book of account in which transactions relating to bills of exchange are recorded. It includes the recording of bills that are payable by a business.

    In a business where the number of bills exchanging hands is large in number, it is very useful, as it is tough to journalize all the bills drawn. A bills payable account generally has a credit balance as it is supposed to be paid at maturity and be a liability.

    Format for B/P book

    • The person, who draws the bill of exchange, is called a “drawer”.
    • The customer, on whom it is drawn, is called a “drawee” or an “acceptor”.

     

    Bills Payable A/c

    See less
    • 0

Most Helping Users

Astha

Astha

Leader
Simerpreet

Simerpreet

Helpful
AbhishekBatabyal

AbhishekBatabyal

Helpful