Accounting for shares in tally

Question BankCategory: Accounts & Financial ReportingAccounting for shares in tally
Kollipara sundaraiah asked 2 months ago

Assess trade of stocks and derivatives transactions in share market.
1.intra trade for stock
2.intra trade for future and options.
3.positional trade for stocks( delivery).
4.positional trade for future and options.
How to passed  accounting entries  in tally above transactions in share market.

1 Answers
Fulgencia answered 2 months ago

there is no short cut for learning all accounting of Trading & investment on one line. But first of all, you need to understand the basics of accounting, then many related things like speculative business and its tax related matter and accounting standard on investment accounting and there must be some knowledge of taxation. 
Following three accounts are used in co-relation to trade in share market:-

  1. trading account
  2. Demat Account.
  3. bank Account.

First you transfer money from your bank account to your trading account. then pass following entry:
Broker Account like Zerodha Securities A/c Debit.
To bank account. 
 
After that various transactions of your trading account are recorded in your books of accounts in various ways.
Following transaction are given only for your reference as detailed accounting is much more than this:- 
 
Indra day trade in Stocks/Equity. 

  1. in cash of loss:-              (1) Speculation loss A/c Dr.  (2) Speculation business exp a/c debit  (3) Credit in your brocker account. like Zerodha Securities A/c
  2. In case of gain:-             (1) Debit in your broker account. like Zerodha Securities A/c (2) Speculation business exp a/c debit  (3) credit Speculation gain A/c.

Indra day trade in Future & OPtions

  1. in cash of loss:-              (1) Speculation loss A/c Dr.  (2) Speculation business exp a/c debit  (3) Credit in your brocker account. like Zerodha Securities A/c
  2. In case of gain:-             (1) Debit in your broker account. like Zerodha Securities A/c (2) Speculation business exp a/c debit  (3) credit Speculation gain A/c.

Positional trade in stocks/Equity. 

  1. in cash of buy:-              Shares of abc A/c Dr. and  Share related exp a/c debit and Credit in your brocker account. like Zerodha Securities A/c
  2. In case of sell:-             Debit in your brocker account. like Zerodha Securities A/c and Share related exp a/c debit and credit share of abc A/c. (if profit then credit in short term or long term capital gain a/c and if loss then debit in short term or long term capital gain account)

Shares a/c can be classified as stock in trade or investment bases on your intention to trade like a business or intention to invest.
Positinal trade in Stocks/Equity. 

  1. in cash of buy:-              Options/future right of abc A/c Dr. and F&O business exp debit and Credit in your brocker account. A/c
  2. In case of sell:-             Debit in your brocker account. and F&O business exp debit and credit in Options/future right of abc A/c(if profit then credit in F&O trading gain a/c and if loss then debit in F&O trading loss account)

 

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