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I have a query in accounts .........please solve it(IPCC)

Situation: If We are preparing investment accounts for financial year 2009-2010 then

Mr. A purchased 500 equity shares on 1st april 2009 @ Rs 18 per share(FACE VALUE Rs. 10). Dividend declared on 1st may @ 10%. Since we are receiving dividend for the 2008-2009 but we create the investment account with the dividend which we receive in 2008-2009 . Why we credit investment account with amount of dividend which we recieve of previous year please tell me the logic behinnd this

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Guest

Posted on 23 March 2010

okay anuj first let me tell u accounts prepare hote hai , create nahi hote...and now come to the point..we prepare a seperate invst acc for each investment and the reason behind this is, we prepare Investment acc. to find out the profit or loss during the year and to account the purchase n sale made during the yr in that investment..