FA7
Unit – 2Final Accounts for Co-Operative Society Q1) What do you mean by cooperative accounting?A1) Any ten people who are able to agreement may document an application to the Registrar of Co-employable Societies according to Section 6 of the Co-usable Societies Act, 1912. By law, might be outlined by every general public and ought to be enlisted with the Co-employable Societies. Adequacy of progress by the law of social orders is relevant just when changes are endorsed by the Registrar of Society. Sorts of Society There are two sorts of society – Restricted liabilities society Limitless liabilities society Any part isn't at risk to pay more than the ostensible estimation of the offer held by him and no part can possess over 20% of the portions of society. Today, government is urging co-employable social orders to help society on the loose. Helpful social orders are usable in different areas like customer, modern, administrations, promoting, and so on.Under bookkeeping arrangement of Co-usable social orders, the term Receipt and Payment is utilized for two crease parts of twofold passage framework. AccountsFollowing records typically kept up by the Co-usable social orders – Day Book (Journal) Day Book (Cash Account) Day Book (Cash Book with Adjustment Column) Day Book (Journal) Day book is a book of unique sections. In a day book, a wide range of money or non-money exchanges are recorded, as per the guideline of twofold passage framework. According to the training continued in the co-usable social orders, a different diary book isn't arranged rather all exchanges are straightforwardly recorded in the day book. Day book has different sides Receipt (charge) and installment (credit) and there are two sections in each side of a day book, one for the money exchanges and second for the change. Exchange for the money receipt and money installment are recorded in real money section and installment side separately. Also, sections are done in charge and credit side of a day book in the change segment. Day Book (Ledger for Cash Account) Since, all the money exchanges are recorded straightforwardly in a day book, it very well may be called as record of money book. Ledgers In the co-usable social orders, posting of record isn't done right this minute section situation. Receipt side of the day book on charge side of the record and installment side of the day book posted on the credit side of the record account. Shutting of Ledgers In the co-employable social orders, adjusting of an individual record is done when any part clear his record or another record is opened. Sums of any remaining records (receipt and installments) are kept all things considered. Adjusting of receipt and installment accounts are not needed. Receipt and Payment Account A receipt and installment account is the rundown of a day book and arranged for a predetermined period. Receipt and installment account is set up from the sums of receipts and installment sides of the record accounts. Last Accounts Exchanging and Profit and Loss record and Balance sheet are set up from the receipt and installment bookkeeping after thought of the change sections. Things show up under the receipt side are treated as pay, and things of the installment side are as consumption. Q2) Clarify the accounting report of cooperative housing society? A2) Budget summary of the Society The Balance Sheet is additionally called the Financial Statement of the Society and gives an image of our Society's monetary status toward the finish of a specific monetary year. The data gave yet to be determined Sheet shows the monetary consequence of the board choices. Circulation of Financial proclamations ought to be completed 14 days before the AGM. So individuals can study and raise any question related monetary figures reflected in the Statement, as individuals reserve the privilege, to know where their commitment is spent or contributed by the Society, and the Committee should realize how to consider the Financial Statement and dissect it. In the first place, all the individuals and the Managing Committee should know the different segments of the Financial Statement – Pay and Expenditure Statement Monetary record Parts of Income and Expenditure Statement Pay side: Individuals' commitment: The significant thing of pay for lodging society is the individuals' commitment towards the upkeep charges. Premium from the bank: Interest pay incorporates revenue fixed stores, premium from a reserve funds financial balance, and premium from individuals on back payments. Other pay: This incorporates incidental pay got by the Society. Consumption side: Costs identified with the property of the Society: It incorporates power charges, local charge, water charges, NA charge, building protection, and so forth Costs identified with the upkeep of the Society: It incorporates Repairs and Maintenance-related costs brought about for support of the Society, which can be identified with electrical work, plumbing work, fix and support of inside and outside of the Society Costs identified with the organization of the Society: It incorporates regulatory costs which are brought about for the everyday smooth working of the Society. For instance, compensation, security charges, transport, printing and writing material, bookkeeping charges, review, and so forth Parts of Balance Sheet There are two segments of a Balance Sheet: (1) Assets (2) Liabilities Resources are things of monetary worth that a lodging society possesses, for example, money balance, bank balance, interests in FDs, duty from individuals, fixed resources of the Society, and TDS receivable from parties. Liabilities are the monetary commitments of a lodging society. They are the sums payable to others later on. For instance, the Society gets a bill for power in the long stretch of March, which is payable in April. At that point this is an obligation on the Society. Q3) Brief the features and objectives of cooperative society accounting.A3) The helpful's bookkeeping framework is a strategy for recording and detailing the monetary aftereffects of its deals. The bookkeeper records the deals of the helpful in an every day diary. These records are then used to create different monetary reports that give an authentic record of the helpful's business action. The fundamental monetary reports utilized in business are the asset report, pay proclamation, explanation of incomes and the assertion of changes in value . The agreeable gave investigates the monetary position, its exhibition throughout a given time-frame, and its capacity to meet money commitments. These reports are the reason for arranging future activities. Each report contains unique, however interrelated data that together give a total image of the monetary activities of the agreeable. Chiefs, bookkeepers and board individuals ought to have the option to comprehend and decipher these reports so they can settle on educated business choices about the fate of the helpful. In synopsis, the budget summaries that are set up in the helpful bookkeeping are same with fiscal reports that are made in different organizations The principle objective is to guarantee that center society are overseen proficiently by methods of: a) Keeping and keeping up legitimate books of records b) Safeguarding community society assets and assets just as those of individuals. It additionally guarantee individuals are paid as high as conceivable in type of pay and profits. This should be possible by: a) Assisting the individuals to create more by and preparing to them. b) Improving and keeping up the amount and nature of the produce before it arrives at the manufacturing plant c) Reducing use d) Through venture, individuals leave a piece of their cash because of them after offer of produce as offers to the general public. 4. What are the sorts of co-operatives in India? A4) 1. Customer Cooperative Society These social orders are basically for purchasers who wish to purchase family unit merchandise at lower costs. The general public purchases merchandise or items in mass sums straightforwardly from the maker on discount rates and offers them to the individuals, hence taking out the requirement for a go between. The bought products are offered to individuals and non-individuals in real money. Capital is raised by giving low denominational offers to the individuals who additionally get profits on the offers. Customer co-agents don't utilize publicizing yet depend on informal. They guarantee a normal stockpile of products at sensible rates. They set up stores or outlets to sell products and profit gigantic exchange limits from makers. Probably the best instances of a purchaser co-usable society are Super Bazar and Apna Bazar. 2. Maker Cooperative Society Otherwise called modern co-agents, these kinds of social orders pay special mind to the limited scale makers in a ferocious market situation. Creation and circulation are taken care of from inside the co-employable. These makers could be ranchers, ayurvedic natural medication makers, natural produce dealers, craftsmanship or handloom makers, craftsmans, and so on Crude materials, fixings, apparatuses, preparing units, and so forth required for the assembling or creating the products are gotten by the individuals straightforwardly, gave to the makers and the last yield is appropriated to the purchasers/non-individuals without a center connection. Makers pool in their assets, increment creation volumes and limit danger notwithstanding the serious industrialist markets. Best models are dairy, fish ranchers, weavers and craftsmans and ancestral co-agents. 3. Co-employable Credit Societies These are metropolitan and rustic monetary social orders that give advances to individuals at low paces of revenue, shielding the individuals from huge obligations to conventional moneylending organizations. They serve a fundamental however exceptionally customized banking job as it were. They have store plans in types of saving records, FD, RD, benefits plans, and so forth The cash secured is then given on advances to individuals as close to home credits, farming advances, lodging or vehicle advance, and so forth These social orders are consistently helped by state and public government sponsorships and subsidizing. A few models are Teachers Co-operation Credit society, State Electric Board Employee Co-operation Credit Society. 4. Advertising Cooperative Society For the most part to support ranchers, these social orders capacity to showcase the produce beneficially at the most ideal costs, increment the haggling strength of the ranchers and shield them from the preliminaries of individual selling and market abuse. The benefits are circulated based on the commitment of produce made. They additionally instruct the ranchers on market costs, balance out stock against request, assist them with getting advances, and help with reviewing, pooling, handling and obtainment of create and give safe stockpiling and solid transportation offices. Some genuine models are Milk Co-agents in Gujarat, Maha Grape, Cotton Marketing Co-operations. 5. Lodging Cooperative Society Lodging communities are a sort of society that gives reasonable lodging to the center and low-pay gatherings. One turns into a part by buying partakes in the co-usable. Rather than claiming the land, the individuals own an offer in the whole organization, which thusly gives them a house to dwell in. Such social orders are normally found in metropolitan and semi-metropolitan urban communities. They build the homes or pads and give them to the individuals to live in and gather the cash in portions. In different cases, they give the land to the individuals who themselves build their own homes. 6. Co-usable Farming Societies The monetarily tested rancher will most likely be unable to expand his agrarian yield separately and acquire ideal benefits. Cultivating communities are a route for ranchers to hold the privilege to their territory, yet pool together and combine land, domesticated animals and gear while procuring an offer in the complete yield according to the commitment made. In better cultivating communities, individuals co-work for pre-planting, seeds, composts and gear, and joint selling, however develop the land independently. In joint cultivating, they pool in the land also. Community occupant cultivating is the sort where the general public rents the land to the ranchers and gathers the lease. In aggregate cultivating centers, ranchers are individuals forever and can't eliminate their property yet can move the land rights to another. Q5) Explain accounts and book keeping of cooperative society.A5) Each co-operative society will keep and keep up the accompanying records and books to record the business executed by it:- (a) Minute books for recording the procedures of the overall body. (b) Register of utilizations for participation containing the name and address of the candidate, the date of receipt of utilization, the number of offers applied for and if there should arise an occurrence of refusal, the date of correspondence of the choice denying admission to the candidate. (c) Admission book, showing the name and address of every part, the date of affirmation, the offers taken by him and the measure of offer capital, if any discounted to him along with the date of each such installment and discount. (d) Nomination registers. (e) Cash book, showing day by day receipts and consumption, and the equilibrium at the finish of every day. (f) Receipt book, containing structures in copy, one of each set to be given for cash got by the general public and the other to fill in as counterfoil. (g) Voucher record, containing all vouchers for unexpected use brought about by the general public, numbered sequentially and recorded sequentially. (h) Ledger of borrowings, showing stores and different borrowings of all sorts. (I) For the situation of social orders giving credits:- (I) Loan record, showing the number and date of payment of each credit gave to individuals the measure of advance, the reason for which it is conceded and the date or dates of reimbursement, recognizing head and interest. Records and Books – Co-employable Society (ii) Liability register showing the obligation of every part to the general public whether by virtue of the credit taken straightforwardly by him or then again because of the credit which he remains as guarantee. (j) For the situation of a general public with limitless obligation, property explanation of individuals showing the resources "and liabilities of every individual part on the date of his affirmation with full subtleties of the property including the review number of the grounds, the assertion being modified as regularly as may be fundamental and regardless at any rate once in three years and such articulations being entered in a register in a sewed volume (k) For the situation of a general public, the working capital of which surpasses twenty thousand rupees, general record showing receipts and payment what's more, the remarkable under different heads from everyday. (l) For the situation of a Co-usable Bank, register of liquid assets appearing the quick liabilities of the general public and the degree of liquid assets accessible to which the Banking Regulation Act, 1949 applies as indicated by the guidelines of the Reserve Bank. (m) Monthly register of receipts and distributions. (n) Register of profit. Q6) What is the applicability of accounting standards of cooperative society?A6) Applicability of Accounting Standards • For the motivation behind appropriateness of Accounting Standards, undertakings are arranged into three classifications, viz., Level I, Level II and Level III. Level II and Level III undertakings are considered as SMEs. The measures for various levels are given underneath. Level I Enterprises • Enterprises which fall in any at least one of the accompanying classifications, whenever during the bookkeeping time frame, are named Level I ventures: • Enterprises whose value or obligation protections are recorded whether in India or outside India. • Enterprises which are currently posting their value or obligation protections as confirmed by the top managerial staff goal in such manner. • Banks including co-usable banks. • Financial foundations. • Enterprises carrying on protection business. • All business, modern and business detailing ventures, whose turnover for the promptly going before bookkeeping period based on inspected budget summaries surpasses Rs. 50 crore. Turnover does exclude 'other pay'. • All business, mechanical and business announcing ventures having borrowings, including public stores, in overabundance of Rs.10 crore whenever during the bookkeeping time frame. • Holding and auxiliary undertakings of any of the above whenever during the bookkeeping time frame. Level II Level II Enterprises • Enterprises which are not Level I endeavors however fall in any at least one of the accompanying classifications are named Level II ventures: • All business, modern and business announcing endeavors, whose turnover for the promptly going before bookkeeping period based on inspected budget reports surpasses Rs. 40 lakhs yet doesn't surpass Rs. 50 crore. Turnover does exclude 'other pay'. • All business, modern and business revealing endeavors having borrowings, including public stores, in overabundance of Rs. 1 crore yet not in abundance of Rs. 10 crore whenever during the bookkeeping time frame. • Holding and auxiliary ventures of any of the above whenever during the bookkeeping time frame. Level III Enterprises • Enterprises which are not covered under Level I and Level II are considered as Level III undertakings. Materialness of Accounting Standards • Accounting Standards are pertinent to the Co-usable Societies. • Their acknowledgment, estimation and divulgence standards will rely upon, the level to which the general public has a place. • Following are a portion of the bookkeeping principles alongside a portion of the fundamental focuses that should be thought of while directing review of a co-employable society. – AS 1 Disclosure of Significant Accounting strategies – AS 2 Valuation of Inventories – AS 3 Cash Flow Statement – AS 4 Contingent Events and Event after Balance Sheet Date – AS 5 Prior Period Items and Change in Estimates – AS 6 Depreciation Accounting – AS 9 Revenue Recognition – AS 10 Accounting for Fixed Assets – AS 14 Accounting for Amalgamation – AS 15 Employee Benefits – AS 16 Borrowing Costs – AS 17 Segment Reporting – AS 18 Related Party Transactions – AS 20 Earning Per Share – AS 22 Accounting for Taxes on Incomes – AS 26 Intangible Assets – AS 28 Impairment of Assets – AS 29 Provision for Contingencies Q7) Explanation on Input and Output GST of housing society accountingA7) Clarification on Input and Output GST of housing society accountingA: A lodging society bookkeeping enrolling more than 20 lakhs INR, independent of individual support installment being underneath or over 7500 INR, is at risk to pay GST. They legitimately will undoubtedly get enrolled and profit the advantages of Input Tax. Each general public pays input charge through writing material things, AMCs, Service charges, and so forth To get the advantage of this Input GST, the general public probably Output GST as well. Most social orders across India follow the accompanying 8 segments in a bill : Local charge Sinking Fund Fix Fund Protection Administration Charge Schooling Training Fund Water Charges Power Bills can have other record heads like Non-Occupancy Charges, Parking Charges, Late Payment Interest, and so on These additional heads draw in GST that would assist the general public with acquiring Output GST which will balance a portion of the Input GST. Q8) From the following Receipts and Payments Account and additional information, prepare Income and Expenditure Account and Balance Sheet of Sears Club, Noida as on March 31, 2018.Receipts and Payments & Account of Sears Club for the year ended 31-3-2018
Additional Information :(i) The club has 200 members each paying an annual subscription of Rs. 1,000. Rs. 60,000 were in arrears for last year and 25 members paid in advance in the last year for the current year.(ii) Stock of stationery on 1-4-2017 was Rs. 3,000 and on 31-3-2018 was Rs. 4,000.Soln A8)Dr. Income and Expenditure A/c for the year ended March 31, 2018 Cr.
Balance Sheet of Sears Club as on 31st March 2018
Interest on 12% Investments In case, a candidate has credited Income and Expenditure Account byRs.800 on account of Interest on 12% Investments, it may be marked correct. Working Notes:Balance Sheet of Sears Club as on 31st March 2017
Q9) From the following Receipts and Payments Account and additional information, prepare Income and Expenditure Account and Balance Sheet of Sears Club, Noida as on March 31, 2018.
Additional Information :(i) The club has 200 members each paying an annual subscription of Rs. 1,000. Rs. 60,000 were in arrears for last year and 25 members paid in advance in the last year for the current year.(ii) Stock of stationery on 1-4-2017 was 3,000 and on 31-3-2018 was Rs. 4,000. A9)Dr. Income and Expenditure A/c for the year ended March 31, 2018 Cr.
Balance Sheet of Sears Club as on 31st March 2018
Interest on 12% InvestmentsIn case, a candidate has credited Income and Expenditure Account byRs.800 on account of Interest on 12% Investments, it may be marked correct.Working Notes:Balance Sheet of Sears Club as on 31st March 2017
Q10) Following is the information given in respect of certain items of a Sports Club. Show these items in the Income and Expenditure Account and the Balance Sheet of the Club:
ANSWER:
Q11) Show the Format of Final Accounts – Form NA11)The Following format depicts about the Final Accounts-Form N in the following page:
Additional Information :(i) The club has 200 members each paying an annual subscription of Rs. 1,000. Rs. 60,000 were in arrears for last year and 25 members paid in advance in the last year for the current year.(ii) Stock of stationery on 1-4-2017 was Rs. 3,000 and on 31-3-2018 was Rs. 4,000.Soln A8)Dr. Income and Expenditure A/c for the year ended March 31, 2018 Cr.Particulars | Amount | Particulars | Amount |
To Stationery consumed To loss on sale of old furniture To electricity expenses To expenses on lectures To surplus
| 22,400 2,400 10,600 30,000 1,52,960
| By Subscriptions By Interest on investments 800 Add interest accrued 160 By Government Grant
| 2,00,000 960 17,400
|
| 2,18,360 |
| 2,18,360 |
Liabilities | Amount | Assets | Amount |
Subscriptions received in advance Donations for building Capital Fund 62,000 Add Surplus 1,52,960
| 7,200 40,000 2,14,960
| Outstanding Subscriptions Stock of Stationery Cash Investments Interest accrued on investments Sports Equipment Books
| 1,01,000 4,000 50,000 8,000 160 59,000 40,000
|
| 2,62,160 |
| 2,62,160 |
Liabilities | Amount | Assets | Amount |
Subscriptions received in advance Capital Fund
| 25,000 62,000
| Outstanding Subscriptions Stock of Stationery Cash Furniture
| 60,000 3,000 20,000 4,000
|
| 87,000 |
| 87,000 |
Additional Information :(i) The club has 200 members each paying an annual subscription of Rs. 1,000. Rs. 60,000 were in arrears for last year and 25 members paid in advance in the last year for the current year.(ii) Stock of stationery on 1-4-2017 was 3,000 and on 31-3-2018 was Rs. 4,000. A9)Dr. Income and Expenditure A/c for the year ended March 31, 2018 Cr.Particulars | Amount | Particulars | Amount |
To Stationery consumed To loss on sale of old furniture To electricity expenses To expenses on lectures To surplus
| 22,400 2,400 10,600 30,000 1,52,960
| By Subscriptions By Interest on investments 800 Add interest accrued 160 By Government Grant
| 2,00,000 960 17,400
|
| 2,18,360 |
| 2,18,360 |
Liabilities | Amount | Assets | Amount |
Subscriptions received in advance Donations for building Capital Fund 62,000 Add Surplus 1,52,960
| 7,200 40,000 2,14,960
| Outstanding Subscriptions Stock of Stationery Cash Investments Interest accrued on investments Sports Equipment Books
| 1,01,000 4,000 50,000 8,000 160 59,000 40,000
|
| 2,62,160 |
| 2,62,160 |
Liabilities | Amount | Assets | Amount |
Subscriptions received in advance Capital Fund
| 25,000 62,000
| Outstanding Subscriptions Stock of Stationery Cash Furniture
| 60,000 3,000 20,000 4,000
|
| 87,000 |
| 87,000 |
Particulars | Rs |
Sports Fund as on 1.4.2015 | 35,000 |
Sports Fund Investments | 35,000 |
Interest on Sports Fund | 4,000 |
Donations for Sports Fund | 15,000 |
Sports Prizes awarded | 10,000 |
Expenses on Sports Events | 4,000 |
General Fund | 80,000 |
General Fund Investments | 80,000 |
Interest on General Fund Investments | 8,000 |
Books of Sports Club Income and Expenditure Account | |||
Dr. |
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| Cr. |
Expenditure | Amount Rs | Income | Amount Rs |
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| Interest on General Fund Investments | 8,000 |
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Balance Sheet | ||||
Liabilities | Amount Rs | Assets | Amount Rs | |
Sports Fund | 35,000 |
| Sports Fund Investments | 35,000 |
Add: Interest on Sports Fund | 4,000 |
| General Fund Investments | 80,000 |
Add: Donations for Sports Fund | 15,000 |
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| 54,000 |
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Less: Expenses on Sports Event | (4,000) |
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Less: Prize Awarded | (10,000) | 40,000 |
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General Fund | 80,000 |
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Last Year’ | Expenditure | This Year’s
| Last Year’s
| Income | This Year’s
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Rs. nP |
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… | (1) | Interest (a)Paid Rs (b)Payable Rs | … | … | (1) | Interest Received (a) On loans and advances (b) On investment
| … |
…. | (2) | Bank Charges | … | … | (2) | Dividend received on shares | … |
… | (3) | Salaries and Allowances of staff | … | … | (3) | Commission | … |
… | (4) | Contribution to staff provident fund | … | … | (4) | Miscellaneous income (a) Share Transfer fee Rent Rebate in interest Sale of forms others items
| … |
… | (5) | Salaries and Allowances of managing Director | … | … | (5) | Land Income and Expenditure accounts | … |
… | (6) | Attendance fees and travelling expenses of Directors and Committee Members | … | …. | (6) | … | …. |
… | (7) | Travelling expenses of staff | … | … | (7) | ... | … |
… | (8) | Rent, rates and taxes | … | … | (8) | … | … |
… | (9) | Postage, Telegram and Telephone charges | … | … | (9) | … | … |
… | (10) | Printing and Stationary | … | … | (10) | … | … |
… | (11) | Audit Feed (Contingencies) General expenses) | … | … | (11) | … | … |
… | (12) | Bads Debts written off or | … | … | (12) | … | … |
… | (13) | provision made for bad debts | … | … | (13) | … | … |
… | (14) | Depreciation on fixed assets | … | … |
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… | (15) | Land Income and Expenditure account | … | … |
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… | (16) | Other | … | … |
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… | (17) | Net Profit carried to Balance Sheet | … | … |
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