Railway Accounts Department Examinations

Tuesday, April 20, 2021

18th Zoom Meeting - Topic on "Suspense Heads - Stores in Stock, Purchases, Sales, Stock Adjustment, SINT, MAC- 25th April, 2021 (Sunday) 6 PM

Nageswara Rao www.appendix3.com is inviting you to a scheduled 18th Zoom meeting.

Topic: Suspense Heads -Stores in Stock, Purchases, Sales, Stock Adjustment, SINT, MAC

Time: Apr 25, 2021 (Sunday) 6 PM



Meeting ID: 850 1947 8403

Passcode: nagesh

   


   Zoom Meetings  - Topics covered so far

Meeting

Date

Topic

1

20.12.20

Introduction

2

27.12.20

Budget

3

03.01.21

Auditing

4

10.01.21

Parliamentary Control

over Railway Finances

5

17.01.21

Appropriation Accounts

6

24.01.21

What is Demand ? What is Grant ?

What is Major Head ?

What is Sub Major Head ?

7

31.01.21

Works Program & IRPSM 

8

07.02.21

Railway Budget 2021-22 - An analysis

9

14.02.21

Traditional Budget, Outcome Budget, ZBB,

 Integrated Budget,  Performance Budget

10

21.02.21

Operating Ratio (Theory & Practical)

11

28.02.21

GeM - Govt e Marketplace

12

07.03.21

MSOP - Model Schedule Of Powers

13

14.03.21

IRFC and EBR (IF)

14

21.03.21

PPP - Public Private Partnership 

15

28.03.21

Dedicated Freight Corridor

16

11.04.21

Financial Appraisal and DCF technique

17

18.04.21

Link Heads - Connecting Govt Accounts with Commercial Accounts


Differences between Receipts & Payments Account and Income & Expenditure Account

 

Differences between Receipts & Payments Account and Income & Expenditure Account

                                                                                                                                                         (1996 – 10 Marks)  

SN

Basis

Receipts & Payments A/c

Income & Expenditure A/c

1

Nature

It is a Statement (emerged from Cash Book summary), not an account emerged out of Double Entry system.

It is an Account emerged out of Double Entry system

2

Similar to

Cash Book / Cash Account

Profit & Loss Account

3

Basis

Cash Basis

Mercantile / Accrual

4

Period

Previous years, Current year & Next year

Current year only

5

Outstanding / Prepaid  Expenses & Incomes

Not considered

Considered

6

Accounts

All Three accounts such as, Personal Account, Real Account & Nominal Account

Nominal Account only

7

Revenue & Capital

Revenue and Capital transactions

Revenue transactions nly

8

Transactions

Cash transactions only

Cash & Non Cash transactions

9

Starts with & Ends with

Opening balance and Closing Balance of Cash on Hand & Cash at Bank

There is no Opening balance and Closing Balance

10

Debit side

Receipts

Expenditure

11

Credit side

Payments

Income

12

Difference between two sides represents

Closing balance of Cash at Hand and Cash in Bank ( Debit balance or Overdraft balance)

Surplus or Deficit

13

Accompanied  by

Nothing

Balance Sheet

 

Fixed Cost and its importance in BEP

 

Fixed Cost & its importance in BEP

 

·         Meaning:  A cost does not change with an increase or decrease in the Goods produced.

 

·         In General, companies can have two types of costs, i.e., Fixed Costs and Variable Costs.

 

·         Also called as Indirect cost or Overhead costs.

 

·         Examples:  Lease Rentals, Salaries, Insurance, Taxes, Interest expense, Depreciation etc.

 

·         All Sunk costs are Fixed Costs.  But, all fixed costs are not sunk costs..

 

·         Sunk cost: Money that has already been spent and which cannot be recovered.  Examples are Machinery Cost, Lease expense, etc.

 

·         A fixed cost per unit is always variable; Whereas Variable cost per unit is always fixed.

 

·         Segregation of Total Costs into fixed Costs and Variable costs helps the Management to decide the scale of Production and Breakeven analysis. 

 

·         Example: A company Produces Pens.  Their fixed costs are Rs. 10000 and Variable costs are Rs. 10 per Pen.  Find the Total cost for 100 Pens and 200 Pens.

100 Units

Costs

No of Pens

Rate per Unit

Total

Fixed

100

100

10000

Variable Costs

100

10

1000

Total costs

100

110

11000

Selling Price

100

120

12000

Profit

100

10

1000

 

200 Units:

Costs

No of Pens

Rate per Unit

 

Fixed

200

50

10000

Variable Costs

200

10

2000

Total

200

60

12000

Selling price

200

120

24000

Profit

200

60

12000

 

·         From the above, the Fixed Cost per Unit is changed from Rs. 100 to Rs.50 when Production was increased from 100 units to 200 Units.  Whereas, Variable cost is remain fixed though production was increased from 100 units to 200 units.

 

So, when change in the Production:

 

·         Fixed cost per unit is variable  (though Total Fixed cost is fixed)

 

·         Variable cost per unit is fixed. (though Total Variable cost is variable)

 

·         The segregation of Total costs into Fixed Costs and Variable costs helps the firms to analyze the breakeven analysis. (Where there is no profit, no loss) and increase their profit capacity.

BEP –Break Even Point = Fixed Costs / Sales Price per Unit – Variable Cost per unit

·         In above example 100 units production level, BEP is 10000/120 – 10 = 91 Units.  

 

·         That means at the point of 91 units, there is no profit or no loss.

 

At 91 units

 

Costs

No of Pens

Rate per Unit

 

Fixed

91

109.90

10000

Variable Costs

91

10

910

Total

91

119.90

10911

Selling price

91

120

10920

Profit

91

0.10

9

 

Profit Rs.9 is almost negligible.  Hence at the production of 91 units, there is no profit, and there is no loss.   So Break Even Point (BEP) is 91 units

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