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Chit Fund Accounting

Naga Praveen (Chartered Accountant) (304 Points)

02 July 2011

Hi Can any one here let me know about the accounting treatment required for subscribing a chit fund and receiving money from the auction and the treatment of loss?

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12 Replies

Anjaly.P.A ( Article( CA Final)) (221 Points)
Replied 02 July 2011

Accounting of Chits

Attached File : 249962 756516 financial statement of kuri.xls downloaded: 7223 times

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Anjaly.P.A ( Article( CA Final)) (221 Points)
Replied 02 July 2011

Am sorry. the attachment is accounting of a chiity business.

Anjaly.P.A ( Article( CA Final)) (221 Points)
Replied 02 July 2011

While you are subcribing a chitty, th entry will be:

Kuri a/c Dr

To CAsh

(For the amount of payment we made)

On pricing/auction you must account in accrue basis:

Cash a/c Dr

Discount a/c Dr.

To Kuri

After that, all the instalment you pay must account in accrue basis:

Kuri A/c Dr.

To Cash

To discount.

The Discount on being prized/auctioned can be written off in the year of being auction/ prized. Or can be treated as a miscellaneous Asset to be w/off and divided by no. of future installments. and w/off on the basis of installments made.

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shubhangi sawant (analyst) (21 Points)
Replied 13 December 2012

i want to know if from total salary company is deucting excess use of mobile bill fom salary and leave deduction from salary in case of excess leave taken by employee, how the journal entry need to be passed.

RAJEEV (CA Articleship) (87 Points)
Replied 04 February 2016

You can find an excel templete for simple maintenance of boooks of accounts in the link

https://rajeevca.wordpress.com/2016/02/04/chit-fund-accounting/

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nisha joshi (article assistant) (57 Points)
Replied 05 March 2016

sir please let me know "why in accounting we are not showing foreman comission in subscriber's account

nisha joshi (article assistant) (57 Points)
Replied 05 March 2016

and what are the accounting effects on chit fund companies

RAJEEV (CA Articleship) (87 Points)
Replied 16 June 2016

Foreman Commssion is the revenue for the chit company. It will not be related to any particular subscriber. Of course we are deducting it from the amount to be paid to the prized subscriber. Correct me if I am wrong.