Page 327 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Accounting for Companies-I

Notes (b) Commission paid to sole selling agents within the meaning of Section 294 of
the Act.
(c) Commission paid to other selling agents.

(d) Brokerage and discount on sales, other than the usual trade discount.
(ii) (a) In the case of manufacturing companies :
(1) The value of the raw material consumed, giving items-wise break up
and indicating the quantities thereof. In this break-up, as far as possible,
all-important basic raw materials shall be shown as separate items. The
intermediates of components procured from other manufacturers may,
if their list is too large to be included in the break-up, be grouped under
suitable headings without mentioning the quantities, provided all those
items, which in value individually account for 10% or more to the total
value of the raw material consumed, shall be shown as separate and
distinct items with quantities thereof in the break-up.
(2) The opening and closing stock of goods produced giving break-up in
respect of each class of goods and indicating the quantities thereof.
(b) In the case of trading companies, the purchases made and the opening and
closing stocks, giving break-up in respect of each class of goods traded in by
the company and indicating the quantities thereof.
(c) In the case of companies rendering or supplying services, the gross income,
derived from services rendered or supplied.
(d) In the case of a company, which falls under more than one of the categories
mentioned in (a), (b) and (c) above, it shall be sufficient compliance with the
requirements therein, if the total amounts are shown in respect of the opening
and closing stocks, purchase, sales and consumption of raw material with
value and quantitative break-up and the gross income from services rendered
is shown.
(e) In the case of other companies, the gross income derived under different
heads.

Notes

1. The quantities of raw materials, purchases, stocks and the turnover, shall be expressed
in quantitative denominations in which these are normally purchased or sold in the
market.
2. For the purpose of the items (ii) (a), (ii) (b), (ii) (d) the items for which the company
is holding separate industrial licenses, shall be treated as separate classes of goods,
but where a company has more than one industrial license for production of items
covered, or the same items at different places or for expansion of the licensed capacity,
the items covered by all such licenses shall be treated as one class. In the case of
trading companies, the imported items shall be classified in accordance with the
classification adopted by the Chief Controller of Imports and Export in granting the
import licenses.

Contd...

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