Accounting entry

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Querist : Anonymous

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14 October 2017 my dear sirs

I am going to enter accounts in tally for the first time. Previously it was handled manually. Its a individual account who gives loan to others and earns interest as income. can you guide me step by step procedure.

Ashiwini Ballodia

Ashiwini Ballodia (Expert)
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14 October 2017 kindly take the BS of last year and feed the opening balance in tally

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RAJA P M

RAJA P M (Expert)
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14 October 2017 Yes... I agreed with Mr. Ashiwini Ballodia.....

ALso you are new in Tally. SO, Please see the link you can get some clarity.

https://www.tallyschool.com/basic-accounting-vouchers/

Querist : Anonymous

Querist : Anonymous (Querist)

16 October 2017 thank you sir, kindly guide me further. My client is doing finance business, gives loan and earns by way of interest. When when he gives loan what entry should i pass. payment entry or journal entry? ledgers under what group?

Ashiwini Ballodia

Ashiwini Ballodia (Expert)
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16 October 2017 Payment entry to be passed. Entry will be
Party a/c (Group Loan - Non Current Asset/ Current Assset) DR
To Bank a/c (Group Bank-Current Asset)

Querist : Anonymous

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17 October 2017 Sir If it is accrual basis/mercantile basis what will be the entry? Previously, in balancesheet they they mentioned parties as debtors. now shall i group the parties under loan and advances?

RAJA P M

RAJA P M (Expert)
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17 October 2017 No...
You can continue same as Previously based. No need under Loans and Advances as a Finance business...

Querist : Anonymous

Querist : Anonymous (Querist)

19 October 2017 Ashiwini sir kindly correct my entry if there is mistake
ABC loan a/c dr (under S.Debtor) 50000
To Bank A/c 50000 (when payment is made)
Abc a/c dr 10000
To Interest receivable 10000 (journal entry for interest due)
Bank a/c dr 60000
abc A/c 60000 (when payment received from abc with interest)
Interest receivable a/c dr 10000
To Interest received (under indirect income) 10000 (in this last entry only I have doubt)

Ashiwini Ballodia

Ashiwini Ballodia (Expert)
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19 October 2017 Entry is almost correct with only one mistake given below Last entry not to be passed i.e Interest receivable a/c dr 10000 To Interest received (under indirect income) 10000 Instead change the second entry i.e Abc Loan a/c dr 10000 To Interest income 10000 The reason of change of entry is because Interest Income is booked on accural basis and not on receipt basis

RAJA P M

RAJA P M (Expert)
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19 October 2017 Dear Ashiwini Ballodia.,

Also the last entry is correct...
Bcoz, the above said financiers also accounting the interest is receipt basis or statndard interest...

Ashiwini Ballodia

Ashiwini Ballodia (Expert)
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19 October 2017 Raja Sir you night be coreect because I am saying the above entry as per normal accounting policy

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Querist : Anonymous

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20 October 2017 Ashwini sir, my client's previous year financial statement shows status as individual. He has deducted staff welfare expenses, conveyance. In his balance sheet he shows his bike value as Rs45000/- which is 10 years old. In one of the annexure he shows his bike value is 12000 after deducting depreciation. He paid 10% as income tax. My doubt is whether comes under individual or firm. If he comes under individual, can he claim deductions and depreciation. If it is a company or firm, his income tax should be 30% but he paid 10% only. Kindly give me a detailed answer. Thank you in advance.

Ashiwini Ballodia

Ashiwini Ballodia (Expert)
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20 October 2017 1st see in BS whether Provision of Depreciation exists or not. Kindly check the PAN no. of your entity from the PAN No. check the 4th digit if it is P - Individual F - Partnership Firm C- Company

Querist : Anonymous

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21 October 2017 sir whats the journal entry for incometax? can i made provision for incometax for individual? under what heat incometax will come indirect expenses or duties and taxes for individual.

Ashiwini Ballodia

Ashiwini Ballodia (Expert)
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21 October 2017 Normally in case of Individual you may adjust with capital account or show it as expenses

Querist : Anonymous

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23 October 2017 sir a cheque which was given by the party was dishonoured and the bank charges for the same should be collected for the party. kindly tell the entry

Ashiwini Ballodia

Ashiwini Ballodia (Expert)
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23 October 2017 Party DR
To Bank Account
The above entry will include bank charges

Querist : Anonymous

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25 October 2017 thank you for your prompt reply sir

Ashiwini Ballodia

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25 October 2017 Welcome Mr.Anonymous 😇

Querist : Anonymous

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06 November 2017 dear ashwini sir, one more question. my clients father was also doing money lending business. He was died four months back. Hence my client deposited a cheque in his account which actually belong to his father's customer as Father's bank account was closed or blocked as he was died.(cheque was issued by that customer in favour of son). How can enter this transaction in son's account.
Thanks in advance

Ashiwini Ballodia

Ashiwini Ballodia (Expert)
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06 November 2017 If your client is the legal Heir than all the asset & liability of father will be transferred to son books at the time of death. So if all the entry was correctly passed at the time of transfer of Asset & liability than customer should be recorded in the books of your client. Kindly first check the entry passed in the book of account of your client at the time of transfer of balance sheet item of his father

Querist : Anonymous

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07 November 2017 sir his father died in july 2017. If there are 2 debtors in fathers account, what entry should i pass in son's book.

Ashiwini Ballodia

Ashiwini Ballodia (Expert)
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07 November 2017 Debtors 1 Dr Debtors 2 Dr To Capital A/c (Being Debtors inherited from father)

Querist : Anonymous

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13 November 2017 sir what is the entry for transfer of assets and liabilities and on which date should pass the entry

Ashiwini Ballodia

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13 November 2017 As stated above kindly pass Debit entry for asset & Credit entry for liability Than the difference (i.e. Balancing Figure) will be capital account

Querist : Anonymous

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14 November 2017 sir if the father account shows cash balance is RS.12000, how can i debit cash in journal entry while transfer?

Ashiwini Ballodia

Ashiwini Ballodia (Expert)
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14 November 2017 In tally cash entry can be passed as journal entry but for other software I don't have idea

Querist : Anonymous

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14 November 2017 thank you sir

Ashiwini Ballodia

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14 November 2017 Most Welcome

Querist : Anonymous

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14 November 2017 sir my another question is about drawings. I've passed a entry for drawings as Drawings a/ c dr To cash. next entry is capital a/c dr To drawings (for transfer

Ashiwini Ballodia

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14 November 2017 The above entry is correct

Querist : Anonymous

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14 November 2017 sir that two entries are

Querist : Anonymous

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14 November 2017 are the two entries required for each Drawings?

Ashiwini Ballodia

Ashiwini Ballodia (Expert)
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15 November 2017 Yes 2 entry are required for drawing entry. Alternative you may direct pass the entry Capital a/c Dr To Cash And in narration give details about drawing

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Querist : Anonymous

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15 November 2017 thank you very much sir

Ashiwini Ballodia

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15 November 2017 Most Welcome