Become a Govt. Certified GST Practitioner in just 60 hrs. Register Now!

Tally entry for option trading

Dimpy (Accounts) (104 Points)

26 July 2024

Hello

How to do accounting entries for options trading in Tally?

Reply
Follow
Share

1 Replies

Rama chary Rachakonda (Master in Accounts & high court Advocate email ID:ramachary64@gmail.com voice no:9989324294) (7519 Points)
Replied 26 July 2024

When trading options, the following accounting entries are typically recorded: *Buyer of an Option (Holder)* 1. _Debit_: Options Premium Expense (or Prepaid Expenses) | Credit: Cash/Bank 2. _Debit_: Loss on Option (if expired worthless) | Credit: Options Premium Expense 3. _Debit_: Gain on Option (if sold or exercised) | Credit: Options Premium Expense *Seller of an Option (Writer)* 1. _Credit_: Options Premium Income | Debit: Cash/Bank 2. _Debit_: Gain on Option (if expired worthless) | Credit: Options Premium Income 3. _Debit_: Loss on Option (if sold or exercised) | Credit: Options Premium Income *Exercise or Assignment* 1. _Debit_: Underlying Asset (if call option) or Cash (if put option) | Credit: Options Premium Income (if seller) or Options Premium Expense (if buyer) 2. _Debit_: Cash/Bank (if seller) or Underlying Asset (if buyer) | Credit: Options Premium Income (if seller) or Options Premium Expense (if buyer) *Expiration or Cancellation* 1. _Debit_: Options Premium Expense (if buyer) or Options Premium Income (if seller) | Credit: Loss on Option (if expired worthless) Note: These entries are simplified and may vary depending on the specific circumstances and accounting standards (e.g., GAAP or IFRS). Please consult a chartered accountant or financial expert to ensure accurate and compliant accounting for options trading activities.

Upgrade to CAclubindia Pro. Subscribe Now!

Join CCI Pro

Recent Topics

More recent discussions | Post

Related Threads

Popular Discussion

Start a New Discussion

CCI Pro

Trending Online Classes

Certification Course on Chat GPT and AI Tools for Professionals

CA Deepak Gupta

Enroll Now

25 April 2025
Live Course on DTAA - International Taxation (Batch 2)

CA Sachin Sinha

Enroll Now

25 May 2025
GST LIVE Certification Course - 42nd Weekend Batch(With Govt Certificate)

Industry Expert

Enroll Now

17 May 2025

view all classess

Subscribe to the latest topics :

Search Forum:

Forum Home

Popular Threads

Recent Posts

Unreplied Threads

Settings