87 comments

    1. Hi Nishant, first of all thanks for presenting your query in account. Prepaid Expenses represent goods or services delivered over a period of time, but which are paid in a lump sum at the beginning of that time period. Whereas Postpaid Expenses are just opposite to it. The amount of prepaid expenses that have not yet expired are recorded on a company’s balance sheet as an asset. Whereas postpaid expenses are recoded on a company’s balance sheet as an liability.

    1. Hi Salman, Gross profit is sales revenues minus the cost of goods sold. Net Profit means all revenues minus all expenses including the cost of goods sold, the selling, general, and administrative expenses, and the non-operating expenses.

  1. What is the basic rule of committee account or how to prepare a committee account sir please tell me immediately jts very urgent for me

    1. It must go like it,

      Refundable Deposit … Dr.
      To Cash … Cr.

      Also, You may appropriately indicate which the corresponding account is affected, example, refundable deposit – internet or refundable deposit – telephone and similar accounts.

    1. Hi Vivekanand, first of all confirm that this entry is covered by insurance or not. If yes then it will go like below example.

      1. Entry for purchase of goods.

      Purchase A/c…Dr. 400000
      To Cash A/c 400000

      2. Entry for recording loss of goods and creating insurance claim.

      Loss Due to Accident A/c…Dr. 100000
      Insurance Claim A/c……..Dr. 300000
      To Trading A/c 400000

      3. Entry for transferring loss to Profit & Loss A/c.

      Profit & Loss A/c………Dr. 100000
      To Loss Due to Accident A/c 100000

        1. It’s simple just remove the insurance part and adjust the loss amount.

          1. Entry for purchase of goods.

          Purchase A/c…Dr. 400000
          To Cash A/c 400000

          2. Entry for transferring loss to Profit & Loss A/c.

          Profit & Loss A/c………Dr. 400000
          To Loss Due to Accident A/c 400000

        2. It’s simple just remove the insurance part and adjust the loss amount.

          1. Entry for purchase of goods.

          Purchase A/c…Dr. 400000
          To Cash A/c 400000

          2. Entry for recording loss of goods
          Loss Due to Accident A/c…Dr. 400000
          To Trading A/c 400000

          3. Entry for transferring loss to Profit & Loss A/c.

          Profit & Loss A/c………Dr. 400000
          To Loss Due to Accident A/c 400000

    1. When the purchaser returns the goods to the seller the Purchaser sends a Debit Note to the seller (ie. the purchaser debits the seller in his books ie. Purchasers Books) and the Seller sends a Credit Note to the purchaser (ie. the seller credits the Purchaser in his Books ie. Sellers Books). Following are the Journal Entries to be passed:

      Entry for Credit Note:

      Sales Return inward A/c. ………. Dr.
      Output VAT A/c. ………. Dr.
      To Debtor A/c.
      (Being goods returned by the customer)

      Entry for Debit Note:

      Creditor A/c. ………. Dr.
      To Goods Return A/c.
      To Input VAT A/c. (i.e. Reverse Credit)
      (Being goods sent back to the seller)

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