E Learnings

Income Statement Marilyn points out that an income statement will show how profitable Direct Delivery has been during the time interval shown in the statement's heading. This period of time might be a week, a month, three months, five weeks, or a year—Joe can choose whatever time period he deems most useful. The reporting of profitability involves two things: the amount that was earned (revenues) and the expenses necessary to earn the revenues. As you will see next, the term revenues is not the same as receipts, and the term expenses involves more than just writing a check to pay a bill. A. Revenues The main revenues for Direct Delivery are the fees it earns for delivering parcels. Under the  accrual basis of accounting  (as opposed to the less-preferred  cash method of accounting ), revenues are recorded when they are earned, not when the company receives the money. Recording revenues when they are earned is the resul...

The Accounting Equation All accounting entries in the books of account for an organisation have a relationship based on the ‘accounting equation’:                                                 Assets = Liabilities + Owners equity Assets Assets are tangible and intangible items of value which the business owns. Examples of assets are: · Cash · Cars · Buildings · Machinery · Furniture · Debtors (money owed from customers) · Stock / Inventory Liabilities Liabilities are those items which are owed by the business to bodies outside of the business. Examples of liabilities are: · Loans to banks · Creditors (money owed to suppliers) · Bank overdrafts Owner’s Equity The simplest way to understand the accou...

What is TDS? TDS stands for tax deducted at source. As per the Income Tax Act, any company or person making a payment is required to deduct tax at source if the payment exceeds certain threshold limits. TDS has to be deducted at the rates prescribed by the tax department. XYZ Ltd makes a payment of Rs 50,000/- towards professional fees to Mr. ABC, then XYZ Ltd shall deduct a tax of Rs 5,000/- and make a net payment of Rs 45,000/- (50,000/- deducted by Rs 5,000/-) to Mr. ABC. The amount of 5,000/- deducted by XYZ Ltd will be directly deposited by XYZ Ltd to the credit of the government. 1) What Is TAN and How to apply for TAN? TAN stands for Tax Deduction Account Number. It is 10 digit alpha numeric number required to be obtained by all persons who are responsible for deducting or collecting tax. Under Section 203A of the Income Tax Act, 1961, it is mandatory to quote Tax Deduction Account Number (TAN) allotted by the Income Tax Department (ITD) on all TDS returns. The proce...

1. What is GST? Goods & Services Tax Law in India is a  comprehensive ,  multi-stage ,  destination-based tax  that will be levied on every  value addition . In simple words, GST is an indirect tax levied on the supply of goods and services. GST Law has replaced many indirect tax laws that previously existed in India. Under the GST regime, tax will be levied at every point of sale. Now let us try to understand “GST is a comprehensive,  multi-stage ,  destination-based tax  that will be levied on every  value addition .” Multi-stage There are multiple change-of-hands an item goes through along its supply chain : from manufacture to final sale to consumer. Let us consider the following case: Purchase of raw materials Production or manufacture Warehousing of finished goods Sale of the product to the retailer Sale to the end consumer Goods and Services Tax will be levied on  eac...