A Revenue Account is prepared which is like the ordinary’ Profit and Loss Account. Thanks to the modern-day billing and invoice software. The part of the old works thus superseded cost Rs 3,00,000. Report a Violation 10. Rs 20,000 is realised by the sale of old materials, and old materials worth Rs 10,000 are used in the construction of the new works and included in the total cost of Rs 5,00,000 mentioned above. Provide for the under-mentioned depreciation, and prepare a Receipts and Expenditure on Capital Account, Revenue Account, Net Revenue Account and Balance Sheet from the following Trial Balance. Depreciation to be provided for on: Building @ 5%, Machinery @ 15%, Mains @ 20%, Transformers etc., @ 10%, Meters and Electrical Instrument @ 15%. The improved accounting system is based on double entry system of book keeping which states that every financial transaction has two aspects i.e. Account Disable 11. The accounts of the company are maintained under Double Account system. It is a continuous . The old plant was scrapped and sold for Rs 7,50,000. Financial Statement of Electricity Companies (IPCC Gr-II) Important Changes: The earlier syllabus (study material of ICAI) included the following, in this chapter: 1. ... for … Suppose, a railway station built in 1980 at a cost of Rs 15,00,000 is replaced, in 2012, by a new station costing Rs 80,00,000. Image Guidelines 5. Uploader Agreement, Read Accounting Notes, Procedures, Problems and Solutions, Learn Accounting: Notes, Procedures, Problems and Solutions, Advantages and Disadvantages of Double Account System | Accounting, Accounts of Electricity Companies | India | Accounting, Double Entry System and Double Account System | Accounting, Important Features of Double Account System | Accounting, Amalgamation: Meaning and Types of Amalgamation. Show the ledger accounts. Here, in this article we have compiled the difference between cash accounting and accrual accounting, take a read. Prohibited Content 3. The capacity of the new works is double the capacity of the old works. Copyright 10. Big companies keep double record by independent accountants. It is the most advanced, systematic, and complete system of recording the financial transactions of a business to satisfy the accounting equation Assets = Liabilities + Equity, whereby each entry is recorded to maintain the … Firstly, the account of the asset which is replaced is not affected at all. The business is ... of each transaction as considered in double entry system. The accounts of the company are maintained under Double Account system. Quickly browse through hundreds of Utility Billing tools and systems and narrow down your top choices. Privacy Policy 8. Under the Double Account System, however, the practice is different. This leads to a need for double-entry accounting where each transaction has at least one credit and one debit in the books. Double-entry refers to an accounting concept whereby assets = liabilities + owners' equity. It is easy to understand and predictable. The journal shown above debits the utilities expense account which represents the cost to the business of using electricity for the period. Company analysis gets simpler since anyone can decode the parameters and entries. These undertakings are usually incorporated under Special Acts and, as a result, the form of accounts is prescribed by, special statute. Final Accounts as per Double Account System which included Revenue A/c, Net Revenue A/c, Receipt & Expenditure on Capital A/c & General Balance Sheet. Introduction Accounting is the system a company uses to measure its financial performance by noting and classifying all the transactions like sales, purchases, assets, and liabilities in a manner that adheres to certain accepted standard formats. ... company, companies engaged in generation / supply of electricity or any other class of companies shall make financial statements in the form as has been specified in or under the Act governing such … One part contains fixed assets and fixed liabilities. In cash accounting system, accounting entries are made when cash is received or paid, while in the case of accrual accounting, the transactions are recorded, as and when the amount is due. Page No. ... As companies proliferated, the demand for reliable accountancy shot up, and the profession rapidly became an integral part of the business and financial … The usage of double account system in public utility concerns such as water, gas, electricity. Also, a Net Revenue Account is prepared which is like the ordinary Profit and Loss Appropriation Account. Content Guidelines 2. Thus, the art of accounting has been ... An accountant designs the accounting system, supervises and checks the work of the book-keeper, prepares the reports based on the recorded data and interprets the … In case of electricity companies, however, the total of the expenditure as per Capital Account is shown on the assets side and the total of receipts is shown on the liabilities side. Advantages of double-entry accrual accounting are the inclusion of assets and liabilities in the ... the company’s Cash account increases, and the company’s Notes Payable account increases. Copyright 9. In 1458 Benedetto Cotrugli invented the double-entry accounting system, which revolutionized accounting. Financial Accounting, Cost Accounting and Management Accounting. Plagiarism Prevention 4. Only when it comes to preparation of the Balance Sheet and the Revenue Account that there is a difference. The costs of labour and materials are 25% higher than when the old works were built. The capacity of the new works is double the capacity of the old works. Electricity Companies: Problem and Solution # 3. The cost of the new plant as per improved design is Rs 60 lakhs and in addition, material recovered from the old plant of a value of Rs 2,40,000 has been used in the construction of the new plant. If any old materials have been used in the new construction: The logic behind the treatment outlined above is firstly, that additional amount should be capitalised only if there is additional capacity and, secondly, that when an old asset is replaced, the amount lost is the asset’s present value rather than its historical cost. So, there is less chance of fraud and mistake because in reconciliation process, such fraud and mistake can be found by auditor. The documents, which communicate these findings ... measuring the financial pulse rate of the company. Electricity Companies: Problem and Solution # 5. The meaning and accounting treatment of: (i) Replacement of assets (ii) Tariffs and dividend control reserve (iii) Clear profits (iv) Reasonable returns and (v) Capital base. The entries made into this system are called journal entries. The Vertex42™ collection of financial spreadsheets includes templates designed specifically for small business owners.We hope that you will find them as useful as we have! With the invention of modernized software systems, like accounting software and GST software, ... utmost important to have all possible things at a place to get the correct data regarding the selling and purchasing power of the company. The total amount capitalised would be Rs 26,00,000, i.e., Rs 15,00,000 + Rs 11,00,000. But despite claims made by some software companies, software can't do it all for you. It is called “Receipt and Expenditure on Capital Account.” On each side there are three columns for amount—one column to show figures up to the beginning of the year, the second column to show expenditure (assets) or receipts (liabilities) during the year and the third column to show total. 2. Depreciation to be provided for on: Building @ 5%, Machinery @ 15%, Mains @ 20%, Transformers etc., @ 10%, Meters and Electrical Instrument @ 15%. The business operates a perpetual inventory system, and the first journal needed is to record the receipt of the inventory. TOS 7. The Four-element bookkeeping system was said to originate in the 11th or 12th century.. Electricity Companies: Problem and Solution # 2. The earliest extant accounting records that follow the modern double-entry system in Europe come from Amatino … Up to the preparation of the trial balance, there is no difference between the Double Account System and the ordinary system. ... Not recognized method as per companies act. Indicate how much would be capitalised and the amount that would be charged to revenue. Accounting is a system meant for measuring business activities, processing of information into reports and making the findings available to decision-makers. Manage dispatch, customer information, service agreements, full … ... ServiceTitan is trusted by more than 100,000 service professionals and by the world's best companies. there is that the earning power and not the cost is the basis for valuing a continuing business. Double entry also means that one of the accounts must have an amount entered as a debit, and one of the accounts must have an … Accounting - Basic Concepts - The first two accounting concepts, namely, Business Entity Concept and Money Measurement Concept are the fundamental concepts of accounting. Image Guidelines 4. A call of Rs 20 per share was payable on 30th September, 2011 and arrears are subject to interest @ 15% p.a. (b)Depreciation is debited to Revenue Account and credited to Depreciation Reserve. The chief features of the Double Account System are as follows: 1. Electricity Companies: Problem and Solution # 5. cycle of measurement of results and reporting of results to decision- ... known description of double entry book keeping was … 2. In cases of Railways, rent on leased land, etc., is also debited to Net Revenue Account. Terms of Service 7. Disclaimer 8. Find and compare top Utility Billing software on Capterra, with our free and interactive tool. An accounting system manages a business's records to keep track of income, expenses, and other financial activities, and is used to create reports. Just like you need ... Electric Service $100.00 Bank Charges $25.00 Credit Card Interest $30.00 Total Operating Expenses $1,040.00 Net Income(Loss) $(660.00) Income Statement Format The Double Account System is a method of presenting the annual final accounts/annual financial statements of public utility undertakings, like Railways, Electricity, Gas, Water Supply, Tramways etc. The Double Account System is merely a way of presentation of final accounts. Rs 20,000 is realised by the sale of old materials, and old materials worth Rs 10,000 are used in the construction of the new works and included in the total cost of Rs 5,00,000 mentioned above. Filter by popular features, pricing options, number of users, and read reviews from real users and find a tool that fits your needs. ... With Successware, you can make more money on each job. Plagiarism Prevention 5. Integrated Accounting System 211-230. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from … Secondly, the amount to be written off is the amount which would have been spent had the asset been acquired now. In bookkeeping terms, what is received is a debit and what is given is a credit. However, the modern system of accounting based on the principles of double entry system owes it origin to Luco Pacioli who first published the principles of Double Entry System in 1494 at Venice in Italy. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. The accounting equation is the foundation of the double-entry accounting system. On a company's balance sheet, it shows that a company's total assets are equal to the sum of the company's liabilities and shareholders' equity. An appropriate amount out of the new expenditure is charged to revenue or written off and the balance is capitalised. The T account is a representation of a scale or balance.” Electricity Companies: Problem and Solution # 4. It means the cash balance of M/s Independent Trading Company will increase by a … debit and credit. The internal audit helps in proper preparation and … The costs of labour and materials are 25% higher than when the old works were built. It is helpful in the overall reporting structure. Accrual basis and Double-entry system of accounting According to sub-section (1), books of account are required to be kept on accrual basis and in accordance with the double entry system of accounting. The Double Account System is a method of presenting the annual final accounts/annual financial statements of public utility undertakings, like Railways, Electricity, Gas, Water Supply, Tramways etc. Content Guidelines 2. All these accounting software are completely free and can be downloaded to Windows PC.These free software offer various features, like: maintain your books of accounts, keep an eye on your income and expenses, record financial transactions, … However, the double-entry accounting method was said to be developed independently earlier in Korea during the Goryeo dynasty (918–1392) when Kaesong was a center of trade and industry at that time. The Double Account System is merely a way of presentation of final accounts. The double-entry accrual accounting system is required for all utilities regardless of class. The following balance have been extracted from the books of an electricity company at the end of an accounting year: Report a Violation, Replacement of an Asset under Double Entry System| Electricity Accounts, Accounting Problems on Inflation Accounting, 5 Accounting Problems on Electricity Companies. Double-entry accounting is defined as any bookkeeping system that involves a debit and/or credit entry for transactions. (a)Interest in all cases is debited or credited to Net Revenue Account and not to Revenue Account. Ordinarily, the amount standing in books against an asset is written off when the asset is replaced by another. Show the ledger accounts. Electricity Companies: Problem and Solution # 1. MANAGEMENT ACCOUNTING Contact: 0707 737 890 Page 129 Advantages of Interlocking Accounting System Main benefit of interlocking accounting system is for big companies. Article shared by : ADVERTISEMENTS: Public utility concerns in England were previously required to prepare their accounts under the Double Account System. These undertakings are usually incorporated under Special Acts and, as a result, the form of accounts is prescribed by, special statute. ... Public companies generally have their accounts audited by registered auditor. The plant when installed in 1985 cost the company Rs 24 lakhs, the components of materials, labour and overheads being in the ratio of 5:3:2. The amount spent on the new asset is capitalised. The amount to be written off will be arrived at as under: Out of Rs 80,00,000 spent in 2012, Rs 69,00,000 would be written off and Rs 11,00,000 i.e., 80,00,000—69,00,000 would be capitalised. It is ascertained that the costs of materials and labour have gone up by 40% and 80% respectively. Suppose further that between 1980 and 2012, prices of materials have risen to 700%, that labour rates have trebled and that the proportion of materials and labour in the old station is 4: 6. Find and compare top Electrical Contractor software on Capterra, with our free and interactive tool. The old plant was scrapped and sold for Rs 7,50,000. Get a customized demo to see how ServiceTitan can help YOUR business grow. 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