Question

In: Accounting

Prepare a catalog of accounts with all the groups of an accounting system, and you should...

Prepare a catalog of accounts with all the groups of an accounting system, and you should also consider having the flexibility necessary to incorporate accounts for future growth in business.
The number of digits employed in your catalog is under your authority.

Solutions

Expert Solution

Catalog of Accounts :

Account Groups Account Heads
I . Equity and Liabilities :
1. Shareholders Fund
Share Capital Capital Account
Reserves and Surplus Capital Reserves , Capital Redumption reserve , Security premium reserve , Debenture redumption reserve , Revaluation reserves, Other reserves
2. Non current Liabilities
Long term borrowings Bonds / Debentures , Term loans , Deffered payment liabilities ,Deposits ,Loans and advances
Other long term liabilities Nature of Liabilties other than above
Long term provisions Provision for employee benefit , Provisions for pending litigation
3. Current Liabilities
Short term borrowings Loan repayable on Demand , Loans and advances
Trade Payables
Other current Liabilities Current maturities of long term debt ,Interest due on borrowings ,Income received in advance
Short - term provisions Provision for doubt ful debts
II. Assets
1. Non - Current assets
Plant property Equipments
Tangible assets Land , Building , plant and Equipment
Intangible assets Goodwill , Patent ,License , Royalty
Capital work in Progress
Intangible assets under Development
Non - Current investment Investments in Property , Shares , Government or trust securities
Longterm loans and advances Capital advances , Security deposit
other non current asset Long term trade receivables , Secutiy deposits , Refundable Tax and retes
2. Current assets
Current investments Investment made for short time period
Inventories Raw material , Work in progress , Finished goods
Trade Receivables Aggregate amount of Trade receivable outstanding
cash and cash equilance Balances with bank , Cheques , Drafts ,Cash on hand
Short term loans and advances
Other current assets
III . Direct Incomes Sale of product or services
IV . Direct Expenses Cost of Goods sold
V . Indirect Incomes Income derived that are not related to business - Interest income , Dividend
VI . Indirect Expenses Expenses not directly attributed to manufacturing

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