An Entrepreneur`s Accounting Process Dilemma
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Case Code: CLFIN044 Case Length: 2 Pages Period: 2023 Pub Date: 2024 Teaching Note: Available |
Price: Rs.150 Organization : Industry : Countries : India Themes: Accounting and ControlJournal Entries, Bookkeeping, Transactional analysis |
Abstract
The case study covers the issues encountered by Rupesh Tingal (Rupesh), a B. Tech graduate who launched a sole proprietorship business of Office Stationery and Equipment with Rs. 450,000 in capital and a Rs. 700,000 bank loan. Later, his close friend, Santosh, joined his business and contributed an equal amount. At the end of the first month of operations, Rupesh decided to do a transactional analysis of the business transactions that had been recorded that month.
However, another friend, Harshit Prasanna (Harshit), who holds an M.Com. degree, advised him to keep a professional book of accounts for his joint business. Harshit's suggestions confused Rupesh. His first dilemma was about the type of business he was running, and the second was about which accounting approach he should employ – the accounting equation method or the traditional accounting method. He wondered if both strategies would produce the same financial performance and position.
This case can assist learners understand numerous accounting ideas and approaches. It can also help them to prepare various books of account and conduct transactions analysis.
Issues
- Recognize the distinction between a partnership and a sole proprietorship.
- Learn how to create trial balances, final accounts, journals, and ledgers.
- Understand the process of transactions analysis
- Know the pros and cons of creating different books of accounts vs. merely doing transactions analysis.
Introduction
Rupesh Tingal (Rupesh), a B. Tech alumnus from Chennai's CMC Institute of Technology, set up an office stationery and equipment business firm in March 2023. He invested Rs. 450,000 in launching his solo proprietorship. In addition, he obtained a loan from Axis Bank with the help of a notarized guarantee from his father. During the initial month in business, he completed the following transactions..
Keywords
Accounting Concepts; Accounting Methods; Journal Entries; Ledgers; Trial Balance; Final Accounts; Transaction Analysis; Business Transactions; Partnership Firm; Profit & Loss Accounts; Balance Sheet
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