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Unit 5 – Masters 75

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Unit 5 – Masters 75

can be different from the opening balance amount specified in the Op. Bal. data field of Account master.

According to Company’s Act – This group appears if Company’s Act Depreciation feature is enabled in Administration à Configuration à Features / Options à Accounts tab. Under this group, following data field appear:

o Rate of Depreciation – This rate defines the rate at which depreciation will be charged according to Company’s Act on the fixed asset. This rate will be applied to the opening balance specified in the Op. Bal. data field of Account master.

è Companies that need to maintain books of accounts, according to both the Company’s Act and Income Tax Act, need to enable Company’s Act Depreciation feature. The need for this feature arises on two counts. Firstly, there is a requirement that depreciation should be charged in books of accounts, according to Company’s Act. Secondly, depreciation according to the Income Tax Act should be reflected in the books of account for tax calculation purpose.

Let us understand with the help of an example. There is a fixed asset worth Rs. 1,00,000. According to the Company’s Act, depreciation is Rs. 20,000, while, according to the Income Tax Act, depreciation is Rs. 25,000. Now in the books of account, journal entry for depreciation of Rs. 20,000 will be entered. According to the Income Tax Act, depreciation of Rs. 25,000 will be reflected in the Balance Sheet manually for tax calculation purpose. Thus, when the balances are carried forward to next financial year, the opening balance for the fixed asset will be Rs. 80,000 as per the Company’s Act whereas opening balance according to the Income Tax Act will be Rs. 75,000. This amount of Rs. 75,000 will be entered in Opening Balance data field in Rate of Depreciation window explained above.

Uncleared Entries – Cheque Issued / Deposited

This sub-window appears if you have selected the Account Group as Bank Accounts and have enabled Bank Reconciliation feature in Administration à Configuration à Features / Options à Accounts tab. This window appears on saving the Account master. Two windows, one for un-cleared entries for cheques issued and one for un-cleared entries for cheques deposited appear. For example, you have deposited a cheque in Bank on 31st March 2009. Now it takes two days for a cheque to be cleared. Hence, on 1st of April, you can show this cheque as un-cleared cheque of previous financial year. In the window, you can specify details about the cheques issued / deposited in the previous year and that are yet to be cleared. Given here is a screenshot of Uncleared Entries – Cheque Issued window.

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Figure 5.5 Uncleared Entries – Cheque Issued

In the window, a grid with various fields appears. Various fields in the grid are:

Date – Enter date on which the cheque was deposited in the bank.

Account – Enter party name for which the cheque was deposited.

Amount – Enter the cheque amount in this field.

Short Narration – Enter the short narration or description about the entry in this data field.

You can also enter cheque number in this data field for your convenience.

è Uncleared Entries – Cheque Issued / Deposited window helps in preparing Bank Reconciliation statement.

After discussing the Group specific data fields and windows, let us come back to the data fields that appear in the Account Master – Add window.

Op. Bal.

Enter opening balance for the account in this data field. Opening balance for an account is the balance in the account at the beginning of financial year.

Dr / Cr

Enter ‘D’ in this data field if the opening balance is a debit amount or enter ‘C’ in this data field if the opening balance is a credit amount.

Prev. Year Bal.

By default, the opening balance as specified in the Op. Bal. data field becomes the previous year balance. This is because closing balance of previous financial year is the opening balance of current

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