Thoughtful Finance Archives - Page 2 of 3

Debtors with Credit Balance

March 10, 2019February 9, 2021 Admin

Debtors are having Debit balance. What is Debtors with Credit Balance? Well, it is possible while accounting. I haven’t seen this concept in MNC accounting. In India, the most preferred software is Tally Accounting. Accountants are finalizing the books with this type of balance. And also saw, books are getting audited. Debtors with Credit balance are presented on the Liability side in the Balance Sheet. The problem is because of Module based accounting is not in place. And the transactions are accounted for through Journal entry is possible. A normal…

Creditors With Debit Balance

March 3, 2019February 10, 2021 Admin

Creditors With Debit Balance! Yes, it is true. It can happen while accounting. I haven’t seen this concept in MNC accounting. In India, the most preferred software is Tally Accounting. Accountants are finalizing the books with this type of balance. And also saw, books are getting audited. Creditors with Debit balance are presented on the Assets side, under the head of Loans & Advances. The problem is because of Module based accounting is not in place. And an accounting of Vendor transactions through Journal Entry is possible. A normal person, who…

Monthly Payment Cycles of a Weekly Wage Earner

February 24, 2019January 19, 2024 Admin

How many payment cycles in a year does a person earn who is getting a weekly wage? Have you ever thought of it? Please read below points. Why Telecommunication companies, like Vodafone, Airtel, Reliance Jio have adopted this same concept in their 28 days recharge? Weekly payment cycles in a year are for 52 weeks. Making of 4 weeks in a month is adequate to make 13 months in a year. i.e. 52weeks / 4weeks. It means there are 13 monthly payment cycles for a person who receives a weekly…

Mobile Recharge for 28 Days

February 17, 2019February 10, 2021 Admin

By making mobile recharge for 28 days, Telecom companies earn for 13 months in a Year! How? Go through this. Nowadays, when you go for a monthly recharge of your mobile talk time or Data, the telecom operator recharges it only for 28 days. Except for BSNL, Reliance Jio, Vodafone, and Airtel mobile recharge 28 days. This whole concept of 28 days recharge has started in 2018. Through this method, you are recharging for 13 months in a Year! Before that, the monthly recharge was of 30 days flat. Then…

Debit Note and Credit Note

February 10, 2019December 21, 2019 Admin

Understanding the concept of Debit Note and Credit Note : In Accounting, you issue an invoice for Sale or receive an invoice for Purchase. When for Purchase & Sale, an invoice is used, then why Debit note and Credit note also are issued? Debit Note : What is Debit Note Means? While accounting Purchase, the Vendor account will get Credited for the liability to pay. Sometimes the payable may need to reduce due to Purchase returns or discount offered after receipt of an invoice etc.. While reducing liability for payment, the…

Hidden Reserves

November 25, 2018January 1, 2020 Admin

Are you new to this? You might have heard about General Reserves, Share premium account, Capital Reserves etc.. But what are Hidden Reserves? Yes, there is a possibility that Hidden Reserves are maintained. Then How? Reserves of an accounting entity that are not apparent from its published Balance Sheet, because of the way in which Assets & Liabilities are stated. Usually, there is insufficient analysis of total figures for items in the Balance Sheet. This is nothing but the understatement of Net Worth of an Entity. How is this possible?…

Conservatism Principle of Accounting

November 18, 2018January 1, 2020 Admin

The conservatism principle of accounting is a generally accepted concept of recognizing ‘expenses’ and ‘liabilities’ as soon as possible when they became certain. This principle follows the principle of accounting of Inventory for the closing stock, which is valued at lower of cost or market price. And is followed in Conservatism Principle in accounting. Recognizing the losses and liabilities as and when they become uncertain. This principle also applies to the estimation of losses. Eg. Provision for doubtful debts, allowances for doubtful receivables. It is a very simple principle! Provide for…

Negative Pledge Clause

November 11, 2018February 11, 2022 Admin

What is a negative pledge clause? A negative pledge clause protects bondholders’ investments. It prevents a bond issuer from taking on future debt, which may result in paying off the current debt. This clause is one of the ways for bondholders to protect/guard their investment. By including a negative pledge clause in a bond agreement, the bondholders prevent the company to raise any further debt in the future which would risk their rights of priority claims on the Company’s assets. The bondholders of the current bond issue prevent the company from issuing…