Nature of Reserves/Funds or ProvisionsA trader considers it to be prudent to reduce intentionally, the amount available for distribution as profit and to set aside the amount thus, saved for some worthwhile business purpose. should be noted in this connection: (i) The amount thus saved is set aside for any of the following five purposes: (a) for meeting future liability or loss; (b) for strengthening the financial position of the business; (c) for fulfilling some specific purpose; (d) for redeeming a liability; (e) for replacing a wasting asset. (it) There are two ways in which the amount available for distribution as profit can be reduced: (1) Indirectly, i.e.. out of gross profit or by debiting profit and loss account. (2) or, directly. i.e., out of divisible profits by debiting profit and loss appropriation account. Profit and loss account is debited only when the object is either to meet an anticipated or future contingent liability or loss or to replace a wasting asset. In all other cases, profit and loss appropriation account is debited. (iii) The sum that is set aside mayor may not be invested;
and if invested, it may be invested inside or outside the business. This depends
upon the object that is sought to be served. It is usual to invest the money
outside the business when the object is to redeem a liability or to replace a
wasting asset. Money may be invested outside or inside the business at one's
option, if the object is to strengthen the financial position of the
business.
Meaning of the terms:1. Fund. If amount equal to the reserve is invested in
outside securities, the reserve will be termed as 'Reserve Fund'.
2. Reserve. If amount set aside from profit is not invested in outside securities, it is termed as 'Reserve' . 3. Provision. If amount set aside as charge against profits or surplus to meet: (a) Depreciation for renewal of the asset. (b) Any known liability, the amount of which cannot be ascertained with accuracy. Provisions are generally, created by debiting the profit and loss account. Provisions are also sometimes termed as 'Specific Reserves' by the accountants. Provisions are created even when there are no profits in the business. Provisions are not surplus. They are not available for distribution amongst the proprietors or shareholders. However, provision in excess of requirement is a surplus. When any provision becomes redundant, it should be credited back to profit and loss appropriation account. It should be noted that sums set aside to meet known liabilities, the amount of which can be determined with accuracy do not fall within the definition of a provision and should, therefore, be called as accrued liabilities. For example, outstanding rent, interest, etc. are accrued liabilities and not provisions.
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Many business use services of Tax Consultants and Chartered Accountants for filing the Tax Return and the tax return of the software is not used. To assist such activity you can export all reports from the software to MS Excel or MS Word and submit it to your tax adviser for financial figures for the business . The software will perform all Inventory Control, Vouchers, Nominal Ledger Accounts along with Working/Trading and Profit & Loss account that will give you all figures ready for export for filing Tax Return. As soon as you are sure about the changes you want in the visual interface and printing regarding your GST requirements we will modify the software software as per your GST requirements. To get any of the off-the-shelf software modified for visual interface and printing please Contact Us Now. We will carry out all required customization for GST as per your requirements in the existing software in professional and timely manner . For any required customization as per GST in any of the off-the-shelf software, please contact us now. We will carry out required customization for GST as per your requirements in the existing software at nominal additional charges. Give us details of required customization for a man-hour or work estimate. For official reference to GST refer to following links:GST (Goods and Service Tax) Circular by Central Board of Excise and Customs (CBEC), Department of Revenue, Ministry of Finance, Government of India. Finance Act 2016 of Government of India HSN codes for Goods and Service Tax (GST) in India Central Board of Excise and Customs - HSN Codes Circular by CBEC, Government of India - About HSN Codes.
Central Goods and Services Tax (CGST) Rules, 2017 Draft government Approved Format Under Goods and Services Tax - Invoice Rules What is GST Compliant Business? What are the specific mandatory fields in an GST compliant invoice? Why the invoice an important financial instrument? What are Registered and Un-Registered Dealers? There is a lot for your business to catch up on those links along with online tax filing and registration for trading. Give us the details of required work you want in the off-the-shelf VAT accounting system and we shall make it GST compliant invoicing and accounting for your business at nominal additional charges. Cheers. Happy Accounting. If you want to know the details of for making VAT/CST system compliant to GST system: Standard rate of $15 per man hour shall be applicable for making any of off-the-shelf VAT based accounting software systems into CGST/SGST Compliant Accounting. Give the details of customization required in any of our off-the-shelf VAT accounting systems made for various business to get a quote of additional charges. See demo of software on website. See official Indian Government CGST/SGST Specification on the panel above here. Click for more information on Value Added Tax (VAT). Free Download of Full Featured Software - Try Full Featured Software Before Order - Time Limited 30 days Full Featured Version of these software are available for download from our website www.freeaccounting.in. HiTech Billing, Accounting Software Off-the-Shelf versions are available for Business, Traders, Industry, Hospital, Hotel, Petrol Pump, Medical Store & Distributor, Automobile or Motorcycle Dealers, Newspaper or Magazine Publishers, VAT Accounting & Billing and Commodity Brokers. | ||||||
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