Accounting and Finance Questions

Golden rules of accounting convert complex book-keeping rules into a set of well defined principles which can be easily studied and applied.

Real accounts involve machinery, land and building etc... Similarly when you credit what goes out, you are reducing the account balance when a tangible asset goes out of the organization. Debit All Expenses And Losses, Credit All Incomes And Gains. This rule is applied when the account in question is a nominal account.

Personal-Account

---Debit the receiver

---Credit the Giver

Real-Account

---Debit what comes in

---Credit what goes out

Nominal-Account

---Debit all expenses and losses

---Credit all income and gains

It is Rs. 10,00,000 now.

It is the allowance paid to an employee who is working on a special assignment.  This amount is completely exclusive of his Compensation plan.  These are given in scenerio's like, when the employee went for On Job Training or an Employee sent for short term Deputation to survive his expenses in the new location.

Trade receivables are amounts billed by a business to its customers when it delivers goods or services to them in the ordinary course of business. These billings are typically documented on formal invoices, which are summarized in an accounts receivable aging report. In the general ledger, trade receivables are recorded in a separate accounts receivable account, and are classified as current assets on the balance sheet if you expect to receive payment from customers within one year.

To record a trade receivable, the accounting software creates a debit to the accounts receivable account and a credit to the sales account when you complete an invoice. When the customer eventually pays the invoice, the accounting software records the cash receipt transaction with a debit to the cash account and a credit to the accounts receivable account.

Trade receivables vary from non trade receivables in that non trade receivables are for amounts owed to the company that fall outside of the normal course of business, such as employee advances or insurance reimbursements. Also, most or all of the transactions passing through the main accounts receivable account are generated by the accounting system, as you create customer invoices and credit memos, whereas the transactions recording non trade receivables nearly always involve journal entries.

A powerful tool to import and validate transaction data from other financial systems and create invoices , debit memos , credit memos and on-account credits

Setup steps:

1. Define the line ordering rules

2. Define the grouping rules - attache the line ordering rules to the grouping rules

The primary Economic function of the Financial system is to match one person's savings with another person's investment.

* As a key component of the financial system, banks allocate funds from savers to borrowers in an efficient manner.

* They provide specialized financial services, which reduce the cost of obtaining information about both savings and borrowing opportunities.

* These financial services help to make the overall economy more efficient.

Finance:It is the branch of economics that studies the management of money and other assets.In simpler terms it can be defined as the commercial activity of providing funds and capital.It addresses questions like -- what funds are required by the org & How they can be raised &  How they have to be allocated etc.

Accounts: It is the occupation of maintaining and auditing records and preparing financial reports for a business. Accounts provides quantitative information about finances. It addresses issues like what amount of funds have been allocated to various activities, how the book-keeping is being done etc.

Both functions are distinct but complimentary to each other.

Finance and accounts are highly specilized and distinct areas and hence most organizations have seperate sections of finance and accounts.