accounting entries

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amitoza (Querist)
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26 April 2010 i want to know the entries regarding purchase and sale of shares in tally.

i have the following query.

Broker account should be open i which head.

spleculation purchase/sale under which head

purchase entries regarding purchase of shares

DEEPIKA GOEL

DEEPIKA GOEL (Expert)
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27 April 2010 For trading you have to open an account with concerned broker with some money and security deposit. So at initial stage it would be part of sundry debtors or deposit will be part of current assets. But as the brokers provide the facility of purchasing more shares in multiple of amount deposited with brokers so it would become creditors if excess purchase has been made by the depositor or holder of shares.

As you have mentioned speculation purchase or sale, it means you are not purchasing it for investment. So, it would be considered as different activity and any profit or loss derived from it, would be taxable separtely under income tax act. And for the purpose of accounting, the speculation purchase or sale would be booked under head of purchase or sale.