a) Recording Inter-Branch Transactions: Where
there are number of branches, inter-branch transactions are likely to take
place, e.g., cash or goods sent by one branch to another or expenses incurred
by one branch on behalf of another. Such
transactions are usually adjusted assuming that they were entered into under
the instructions from the H.O. Suppose Kolkata
branch transfers some goods to Mumbai branch under the directions of the
H.O. The entries will be as follows:
|
1.
|
In
the books of Kolkata Branch:
Head
Office A/c
Dr
To Goods Supplied to Branch A/c
|
XXX
|
XXX
|
|
2.
|
In
the books of Mumbai Branch:
Goods
received from Branches A/c
Dr
To Head Office A/c
|
XXX
|
XXX
|
|
3.
|
In
the books of Head Office:
Mumbai
Branch A/c Dr
To Kolkata Branch a/c
|
XXX
|
XXX
|
Note: Inter-branch transactions without
the knowledge of head office may be passed as between the branches only in the
usual manner.
b) Minimum Rent:
Minimum Rent is the amount below which landlord never accepts in
any year from the person who has to pay royalty in case of mines. Minimum Rent
is also known as Fixed Rent, Dead Rent, Flat Rent or Contract Rent. If in any
year amount of royalty is less than the amount of minimum rent, the amount of
minimum rent is payable by the person who has to pay the royalty, but if the
amount of royalty is more than the amount of minimum rent, royalty will be
paid.
Importance of Minimum Rent:
Fixation of minimum rent is in the interest of landlord because it
guarantees him the receipt of the minimum rent even in the case of low output
or sales. In the absence of minimum rent clause, only the actual royalty will
be paid to the landlord. Moreover, it also gives incentive to the lessee to
enhance production or sales because he is bound to pay minimum rent.
Redeemable Minimum Rent:
Generally, when minimum rent is more than royalty, then minimum rent
is payable if no such provision is given in the agreement, but if it is
mentioned in the agreement that when royalty will be more than minimum rent,
the excess of minimum rent over royalty paid in the earlier years will be
written off out of the excess of the royalty over minimum rent in the coming
years such minimum rent is called Redeemable Minimum Rent.
c) Benefits of
Accounting Standard:
Accounting standard seek to
describe the accounting principles, the valuation techniques
and the methods
of applying the accounting principles
in the preparation and
presentation of financial statements
so that they may
give a true and
fair view .
By
setting the accounting standards, the accountant has following benefits:
(a)
Standards reduce to a reasonable extent or
eliminate altogether confusing
variations in the
accounting treatments used
to prepare financial statements.
(b)
There are certain areas where
important information is not statutorily required to be disclosed. Standards
may call for disclosure beyond that required by law.
(c)
The application of
accounting standards would
,to a
limited extent, facilitate comparison
of financial statements
of companies situated in
different parts of the
world and also of different
companies situated in the same
country. However, it should be
noted in this
respect that differences in the institutions, traditions and
legal systems from
one country to
another give rise to differences
in accounting standards
adopted in different
countries.
d) Difference
between Complete Repossession and Partial Repossession
If the hire purchaser fails to pay any of the installments in
time, then default is said to have been committed by him. When a default in the
payment of any installment is committed by the hire purchaser, as the ownership
of the goods sold has not been transferred to the hire purchaser, the hire
vendor has the right to take back the possession of the goods from the hire
purchaser and treat the previous installments paid by the hire purchaser as
mere hire charges for the use of the asset till then. There are two types of Repossession:
(a)
Complete Repossession
(b)
Partial Repossession
If the hire vendor takes back complete possession of the goods
from the hire purchaser, then it is called complete repossession. Sometimes, in
case of default, the hire vendor takes back only a part of the goods from the
hire purchaser, leaving the remaining part with the hire purchaser himself. It
is a case of partial repossession.
In case of complete repossession, Vendor will close the account of
the hire purchaser by transferring the balance to the goods repossessed
account. But in case of partial repossession, Vendor will close the hire
purchaser’s account but an entry will be passed with the agreed value of the
assets which has been taken back by the vendor.