Question

11. Explain types of receivables by giving one example of each.

12. How to identify cash and credit transactions?

13. Explain any 3 special features of GST.

14. Explain difference between trade discount and cash discount?

OR

Why journal is known as first book of accounts?​

Answer 1

Answer 11.

$\mathscr \pink \star \underline {account \: receivable}\red \star$

Accounts receivable are amounts that customers owe the company for normal credit purchases.

$\mathscr \pink \star \underline {notes \: receivable}\red \star$

Notes receivable are amounts owed to the company by customers or others who have signed formal promissory notes in acknowledgment of their debts.

$\mathscr \pink \star \underline {other \: receivable}\red \star$

Accounts receivable and notes receivable that result from company sales are called trade receivables, but there are other types of receivables as well. For example, interest revenue from notes or other interest-bearing assets is accrued at the end of each accounting period and placed in an account named interest receivable.

Ans 12.

The only difference between cash and credit transactions is the timing of the payment. A cash transaction is a transaction where payment is settled immediately. On the other hand, payment for a credit transaction is settled at a later date.

Ans 13.

$\mathscr \pink \star \underline {single \: indirect \: tax}\red \star$

GST has been introduced as a single, unified tax reform. It has eliminated many existing indirect centre and state taxes like Central Value Added Tax, Special Additional Duty of Customs, Service Tax, and VAT and converted them into a single tax.

$\mathscr \pink \star \underline {input \: tax \: credit \: system}\red \star$

One of the most prominent GST features in India is the input tax credit. If a manufacturer or service provider has already paid input tax on a purchase, the same can be deducted from their total output tax liability.

.

$\mathscr \pink \star \underline {gst \: composition \: scheme} \red \star$

SMEs with an annual turnover of up to Rs. 1 crore or Rs. 75 lakhs in specified states can also voluntarily opt for the composition scheme. With this scheme, the businesses can pay a fixed GST rate of 1% on their turnover.

Ans 14.

Trade discount is given on the catalogue price of the goods while the cash discount is given on the invoice price. Trade discount is granted with the aim of increasing the sales in bulk quantity, whereas Cash discount is granted to facilitate a quick payment. A trade discount is shown as a deduction in the invoice.