Easy Account

On 1st April, 2020 Hiya Ltd. purchased a machinery for 1.20,000 and on 30th September, 2021 it acquired another machinery for 20.000. On 30th June 2022. a part of machinery purchased on 1st April, 2020 costing 5,000 became obsolete and sold for 500. On the same date a new machinery was purchased for 8,000. Depreciation is to be charged @ 10% p.a. on written down value method. Books of accounts are closed on 31 March every year. Show Machinery Account for three years from 1 April, 2020 to 31st March, 2023 To show the Machinery Account for three years from 1st April 2020 to 31st March 2023, we will record all the machinery-related transactions and calculate the depreciation as per the written down value method. Let's create the Machinery Account: Machinery Account Date Particulars Amount (Rs.) Amount (Rs.) Amount (Rs.) 01-Apr-2020 To Bank (Purchase) 1,20,000 1,20,000 30-Sep-2021 To Bank (Purchase) 20,000 1,40,000 30-Jun-2022 By Sale of Old Machinery (500) 1,39,500 30-Jun-2022 To New

In the context of a Profit and Loss Ratio, "Sacrificing Ratio" and "Gaining Ratio" are terms used to describe the changes in the profit-sharing ratio of partners in a partnership firm when there is a change in the partnership. Sacrificing Ratio: The Sacrificing Ratio refers to the proportion by which one or more partners reduce their share in the future profits of the firm to accommodate new partners or to adjust the profit-sharing ratio among the existing partners. This reduction in the share of profits represents the sacrifice made by the partners in favor of others. Calculation of Sacrificing Ratio: The Sacrificing Ratio is calculated by finding the difference between the old profit-sharing ratio and the new profit-sharing ratio for the partners who are sacrificing a part of their share in the firm. Formula for Sacrificing Ratio: Sacrificing Ratio = (Old Share - New Share) Gaining Ratio: The Gaining Ratio, on the other hand, represents the proportion by which one

 Sure! Here are three points of importance of financial statements: Understanding Business Performance: Financial statements, like the Income Statement and Balance Sheet, provide a clear picture of a company's financial performance over a specific period. They show the revenue earned, expenses incurred, and overall profitability, helping stakeholders assess how well the business is doing. Informed Decision-Making: Investors, creditors, and management use financial statements to make informed decisions. Investors can gauge the company's potential for growth and profitability, while creditors can assess creditworthiness. Management uses them to identify areas needing improvement and plan future strategies. Transparency and Accountability:  Financial statements promote transparency in a company's financial dealings. They demonstrate the organization's financial health to external parties, fostering trust and accountability. This transparency is essential for complying wit

Receipt and Payment Account: Nature: Receipt and Payment Account is a summary of cash and bank transactions of a non-profit organization. It records all cash inflows and outflows, irrespective of whether they are revenue or capital in nature. Opening Balance: The Receipt and Payment Account usually begins with the opening balance of cash and bank on the starting date of the accounting period. Adjustment: It does not involve any adjustments for outstanding expenses, prepaid income, accruals, or depreciation. It only records actual cash and bank transactions during the accounting period. Income and Expenditure Account: Nature: Income and Expenditure Account is a summary of revenue and expenses of a non-profit organization. It records all revenue (income) and expenses (both revenue and capital) incurred during the accounting period. Opening Balance: The Income and Expenditure Account does not consider the opening balance of cash and bank. It only includes revenue receipts and expenses