Multiple types of transactions with single party issue

A/c entries 207 views 3 replies

Ram B Shahi

Article Trainee

24 Points Joined January 2017

I have query that is it possible to make entries in accounting softwares for multiple types of transsactions with a single party with a single party account?

For better understanding go through the following example.

Let Mr. A is a party, with him i purchased some inventories, sold some fixed assets, borrowed sone fund as loan, he got some commission form me, he is also an agent of me, he is also a one of the client of me for some purpose, he had also some shares of mine, etc.

In this case can i make all the above entries in tally/sap/erp by making a account Mr. A, if yes then, what should be the procedure of creating party account to effect the all the above mentioned transactions?

Immediate help is required.

Thanks In Advance

Replies (3)

Baljeet Singh

CA B.Com (H)

954 Points Joined March 2012

Hi Ram,

You can do all these adjustments through a single ledger account. Though, it is suggested to create separate accounts, if possible, as this would reduce your clerical work of keeping tabs of different dealings you undertake. Also, your financial reporting would not be accurate as Mr. A would be your Debtor, Creditor, and Shareholder at the same time. These are required to report under separate heads as per Schedule III.

The creation of ledgers is also dependent on the type of ERP you are using.

Also FYI, this would be covered under the reporting required by the Companies Act w.r.t related party transactions.

Ram B Shahi

Article Trainee

24 Points Joined January 2017

Thank You Mr.Baljeet for your advice.

I totally understand with your tellings. Though i just want to know that if i want to do it with a single party account then, under which group Mr. A should be fitted while creation of ledger in tally erp 9?

Baljeet Singh

CA B.Com (H)

954 Points Joined March 2012

Hey,

There is no universal heading for all the types of transactions you want to carry out. I suggest start with the first transaction, say you are purchasing something, create Mr. A as your Creditor.

You can use account name as "A (Purchase)", so on so forth.