Account 3 Marks Question

Expense is the cost incurred in producing and selling goods and services. Example: cost of goods sold and the amount paid for salaries, rent, commission, etc. On the other hand, expenditure is a wider term which includes expenses also. Expenditure is the amount spent on acquiring assets, goods and services.

Two advantages of GST are: decrease the cost of goods and reduces tax invasion.

Accounting is often considered the language of business, as it communicates to others the financial position of the company. And like every language has certain syntax and grammar rules the same is true here. These rules in the case of accounting are the
Accounting Standards (AS). They are the framework of rules and regulations for accounting and reporting in a country. Let us see the main objectives of forming these standards.
i. The main aim is to improve the reliability of financial statements. Now because the financial statements have to be made following the standards the users can rely on them. They know that not conforming to these standards can have serious consequences
for the companies.
ii. Secondly it facilitates the comparability. Following these standards will allow for inter firm and intra-firm comparisons. This allows us to check the progress of the firm and its position in the market.
iii. It also looks to provide one set of accounting policies that include the necessary disclosure requirements and the valuation methods of various financial transactions.

Discount allowed by HCL is a Trade Discount. It is not recorded separately in the books of account. Instead purchase is recorded at net value, i.e., Purchase Price less Trade Discount.

Posting or posting the Entries means:
The process of transferring the information contained in a Journal to a Ledger is called Posting. The following procedure is followed for posting the debit and credit aspects of the transaction recorded in a Journal.
Posting of Account debited or credited in a Journal entry: The steps to be followed are:
i. Identify in the Ledger the account to be debited or credited.
ii. Enter the date of the transaction in the 'Date' column on the debit or credit side of the account.
iii. Write the name of the account which has been credited or debited in the respective entry
in the 'Particulars' column on the debit or credit side of the amount as 'To or by (name of account credited or debited)'.
iv. Record the page number of the Journal where the entry exists in the Journal folio (J.F) column.
v. Enter the relevant amount in the 'Amount' column on the debit or credit side.