Accounting treatment

A/c entries 941 views 9 replies

Respected Sir / Madam

Please Give me the suitable treatment for year 2010-11,  2011-12, 12-13 in Receipt and payment account, Income and Expenditure account, and balance sheet.

Payment made by Ram for purchasing assets for Shyam in year 2010-11 for Rs. 10000.

In year 11-12 Shyam did not make any payment to Ram for the purchase.

In 12-13 Shyam made the payment to Ram.

 

Thanks in Advance.

Replies (9)

Receipts and Payment A/c is nothing but your cash book. Income and Expensiture A/c is nothing but your P & L. Hence in the year 2010-11 Asset will be shown under Fixed Assets and Ram will be shown as a creditor in the Balance Sheet.  

In the year 2011-12 no entry related to this is to be passed other than any depreciation provided on the asset.

In the year 2012-13 Ram will be debited and your cash/bank will be credited wherein Ram will be shown on the payments side of your receipts and payments.

Experts please check the entries in this regard

10-11

Fixed Asset 10000

To Cash 10000

 

Shyam 10000

To Fixed Assets

 

11-12

No entry

The fixed asset is not of Ram. Then it should not be treated as fixed asset by him and hence no depreciation.

 

12-13

Cash 10000

To Shyam 10000

 

Shivani

1) Is it partnership firm of Ram & Shyam.

2) If no then it will treat as loan.

Please clarify otherwise entries go wrong.

 

Dear Kishan,

RECEIPT AND PAYMENT is mere Cash Accounts therefore any cash related transactions will reflect in Reeipt and Payment Account.

IN THE BOOK OF RAM

Year 2010-2011........ Cash paid to Receivable / Shyam Rs. 10,000

Year 2011-2012........ No Change

Year 2012-2013........ Cash received from Receivable / Shyam Rs. 10,000

INCOME AND EXPENDITURE IS NOTHING BUT PROFIT AND LOSS ACCOUNTS. It means all expenses and income related transaction reflects here.

IN BOOKS OF RAM

Since no expense and loss transaction is effected in this transaction for Ram there fore No affect in 2010-2011, 2011-2012, 2012-2013

BALANCE SHEET IS A STATEMENT THAT REFLECTS TOTAL ASSETS AND TOTAL LIABILITY

Year 2010-2011........ Rs. 10,000 is classified under Receivables

Year 2011-2012........ No Change

Year 2012-2013........ Amount paid by Shyam therefore receivables are reduced by Rs. 10,000

 

 

IN THE BOOK OF SHYAM

RECEIPT AND PAYMENT ACCOUNT

Year 2010-2011........ No cash transaction in this year therefore nothing will appear 

Year 2011-2012........ No Change

Year 2012-2013........ Amount paid by Ram therefore payable are reduced by Rs. 10,000

 

INCOME AND EXPENDITURE STATEMENT
Year 2010-2011........ Depreciation will give affect to Expense side

Year 2011-2012........ Depreciation will give affect to Expense side

Year 2012-2013........ Depreciation will give affect to Expense side

 
ASSETS AND LIABILITY SIDE
Year 2010-2011........ Fixed Asset is increased and Payables are increased

Year 2011-2012........ No Change

Year 2012-2013........ Payable are decreased

 
 

 

In the year 10-11

Fixed asset a/c dr 10000

to Shyam                           10000

in the year 11-12

Depreciation is to be claimed (substance over form)

Depreciation a/c dr

 to Fixed asset

In the year 12-13

Shyam a/c dr 10000

to cash/ bank a/c

 

Originally posted by : Shivani

Experts please check the entries in this regard

10-11

Fixed Asset 10000

To Cash 10000

 

Shyam 10000

To Fixed Assets

 

11-12

No entry

The fixed asset is not of Ram. Then it should not be treated as fixed asset by him and hence no depreciation.

 

12-13

Cash 10000

To Shyam 10000

 

Shivani

In The year 10-11 we are not paying any cash so it will be directly

Fixed a/c dr 10000

to Shyam A/c

Dear Shivani,

Receipt and Payment Accounts, Income and Expenditure Accounts and Balance Sheet are the statements which reflects some specific type of transactions.

 

Accounting Entries are for recording transactions but these statements reflects balances which helps financial manager to analyse accounts such current assets fixed assets.

 

Under these statements main emphasis are made on classification transaction under correct head to reflect true picture.

Dear Mitesh,

Ram is purchasing goods for shyam. So its fixed assets of Shyam.

You have considered the case as Ram has purchase fixed assets from Shyam.

Yaa ur right my mistake


CCI Pro

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