Accounting treatment for chit fund business
This query is : Resolved
16 November 2011
hii . my query is in respect of chit fund business .. the assessee has a chit fund business . the monthly collection is Rs. 50,000 . for which the entry is Cash A/c To Chit Collection A/c .
the assessee holds an auction of the chit every month for the members .the assesse pays the amount to the successful bidder . in this case he has paid rs 35,000 . so the entry is Chit Advance A/c To Cash ..
i want to know if the above accounting treatment in respect of chit funds is correct
thank you .
the assessee holds an auction of the chit every month for the members .the assesse pays the amount to the successful bidder . in this case he has paid rs 35,000 . so the entry is Chit Advance A/c To Cash ..
i want to know if the above accounting treatment in respect of chit funds is correct
thank you .
CA SUMiT PATWARi
(Expert)
16 November 2011
Yes, the accounting treatment is correct.
It can be Chit Recoverable (Mr Name) A/c... Dr
To, Cash A/c
It can be Chit Recoverable (Mr Name) A/c... Dr
To, Cash A/c
16 November 2011
in case of the second entry , do i have to debit Chit Collection Account as well ?
CA SUMiT PATWARi
(Expert)
16 November 2011
No chit collection account is not to be debited.
The chit collection account will be maintained as credit balance.
Chit collection (Cr) = Chit recoverable (Dr) + Surplus collection (Dr)
The chit collection account will be maintained as credit balance.
Chit collection (Cr) = Chit recoverable (Dr) + Surplus collection (Dr)
16 November 2011
so Chit collection a/c & Chit Recoverable A/c will be having the same balance as at the end of the year , with Chit Collection A/c showing cr balance & Chit Recoverable A/c showing debit balance ?
16 November 2011
also wht bout the commission & premium (i.e surplus) ?
is the following entry correct :
Chit Collection A/c
To Commission A/c
To Premium A/c
is the following entry correct :
Chit Collection A/c
To Commission A/c
To Premium A/c
CA SUMiT PATWARi
(Expert)
16 November 2011
yes you are right!!!
16 November 2011
also wht bout the commission & premium (i.e surplus) ?
is the following entry correct :
Chit Collection A/c
To Commission A/c
To Premium A/c
is the following entry correct :
Chit Collection A/c
To Commission A/c
To Premium A/c
CA SUMiT PATWARi
(Expert)
16 November 2011
You can see for detailed help on accounting entries!
https://www.caclubindia.com/forum/chit-fund-accounting-152751.asp
https://www.caclubindia.com/forum/chit-fund-accounting-152751.asp
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