Accounter ledger head

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Hi

 

My Question for today is,

 

IS there any rule for creation of ledger head. I mean on what basis should a ledger head such as repairs and maintanance account, Salary account etc be created. how specific should the expense be?

 

Could a company maintain accounts such as Factory expense account, contracting expense account etc, which are very vague and doesnot explain the specific nature of account?

Replies (6)

I remember that in some rule or act it says if expense is more than 1% or 10% of the total revenue then the same should be shown seperately under a seperate ledger head, i just donot know where i have read that and how it is applicable

 

 

Help needed

Hi there

Under revised schdeule expenses  / income which is more than 1% of revenue from operations OR 100000 whichever is higher need to disclosed seprately.

Previously it was 1% of total income OR 5000 whichever is higher need to disclosed seprately.

 

Thank you gaurav

 

SO what about second part of my question. shouldnt the account head be more sepcific?? or can someone create account head as vague as Factory exp, contract exp etc???

Its depends on nature of expenses as well material effect on financials, but yes it should be.

according to the revised schedule 6', an item of  income r expenditure exceeding 1% of total revenue or expenditure should be separatey disclosed.

the emphasis is on matriaity concept .

 

\

Keerthi, Pl read guidelines issued by ICAI carefully... You interpetating wrongly.. Its not like that you write..

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