GUIDANCE IN final accounts

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Querist : Anonymous

Querist : Anonymous (Querist)

19 July 2010 SIR I HAVE A QUESTION IN FINAL ACCOUNTS.
IF AN ENTERPRISE IS INVOLVED IN PROVIDING NET SERVICES LIKE CYBER CAFE,IT ALSO PROVIDING COMPUTER EDUCATION AND IT ALSO SELLING COMPUTER PARTS.
SO ALL THE REVENUE MUST BE CREDIT IN TRADING A/C AS IT IS ITS TRADING ACTIVITY. AND ALL THE EXPENSES RELATED IN PROVIDING EDUCATION ARE DIRECT EXPENSES SO IT WILL BE DR. IN TRADING A/C RATHER IN PROFIT AND LOSS A/C.

Shudhanshu Agrawal

Shudhanshu Agrawal (Expert)

20 July 2010 Dear,

All three activities are different

Cyber cafe is a service providing activity and for this only Profit & Loss A/c is prepared. Trading A/c is not prepared for service organisations.

Computer Education can be a social welfare activity. If not then it will be service activity and hence only proft & loss account is required.

Selling computer and its parts is a trading activity and hence both trading and profit & loss account will be required

Querist : Anonymous

Querist : Anonymous (Querist)

20 July 2010 SIR THANKS FOR REPLY.SUPPOSE NIIT IS PROVIDING COMPUTER COURSES IT IS NOT NOT DOING ANY SOCIAL WELFARE.THERE ARE DIFF. CENTERS PROVIDING EDUCATION SO IT IS SERVICE ACTIVITY.NOW,SUPPOSE ANY ORGANISATION PROVIDING COMPUTER EDUCATION,PROVIDING NET SERVICES AND SELLING COMPUTER PARTS THEN COMBINED TRADING AND P&L A/C SHOULD BE MADE

Akhil Agrawal

Akhil Agrawal (Expert)

21 July 2010 well i will suggest prepare different Trading or P & L for 3 activities & then merge them up at year end if u can identify the expenses individually with the activity.

If not then preapre Trading activity show sales in that, & in P & l show other activities

Shudhanshu Agrawal

Shudhanshu Agrawal (Expert)

21 July 2010 I agree with Mr. Akhil. Prepare different financial statements for each business and then club them in one. With the help of this you will be able to keep control on each business.

Querist : Anonymous

Querist : Anonymous (Querist)

21 July 2010 SIR THANKS I WAS JUST CONFIRMING MY KNOWLEDGE.I HAVE CLEARED C.P.T. NOW ONLY.
MY BROTHER GOT THE PROJECT AS HE IS IN 12 CLASS, AND HE GOT THE QUESTION RELATED TO ABOVE QUERY.IN THAT QUESTION TOTAL REVENUE IS GIVEN AND THE RECEIPTS OF INTERNET SUBSCRIPTION AND FEES OF 1ST QUARTER IS GIVEN.

Shudhanshu Agrawal

Shudhanshu Agrawal (Expert)

21 July 2010 For 12th standard things are different. In 12th nobody knows consolidation of Financial Statements. In case of 12th class you can make just one trading and P & L account. But if you will make seprate trading and P & L accounts then your answer will be different and everybody will be surprised with it.

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