Statement of affairs-Balance sheet-Subsidiary Book-Charges A/C-Interest A/C-Commission A/C-Exchange A/C-Suspense A/C-Sundry Deposit A/C & other internal A/Cs-Posting of vouchers.

Statement of affair: The Statement of Affair is a summary of a Company’s assets and liabilities.

 

Difference between Statement of Affairs and Balance Sheet

Statement of Affairs and Balance Sheet are two varying terms, but they too nearly resemble which causes confusion in distinguishing them. For overcoming from these doubts regarding the two entities, you need to understand their meaning clearly along with their differences. The major differences between Statement of Affairs and Balance Sheet are disclosed in detail below:

 

 

Basis for ComparisonStatement of AffairsBalance Sheet
MeaningStatement of Affairs is a statement showing assets, liabilities and capital of the entity prepared by a bank company.A Balance Sheet is a statement showing assets, liabilities and equity of the company prepared on the basis of the double entry system of bookkeeping.
Part of Financial StatementNoYes
FormatNot specifiedSpecified

 

Subsidiary account: A subsidiary account is an account that is kept within a subsidiary ledger, which in turn summarizes into a control account in the general ledger. A subsidiary account is used to track information at a very detailed level for certain types of transactions, such as:

 

Other assets- General Ledger

Adjusting account debit-Subsidiary ledger

Account receivable- Sub-subsidiary ledger

 

 

Charges A/C: A bank charge can result from the account holder for maintaining bank account, or for overdrafts, or from any of a wide variety of other banking activities and services. Also called bank fee. The following items are example of charges account in our  XYZ Bank:

  • Service charge
  • Clearing house charge
  • Charge on mobile banking
  • Charge on CIB

 

  • Charge on account close
  • Charge on bill purchased
  • Charge on L/C etc.

 

Interest account: Payment in exchange for the use of money over time. You can earn interest by lending your money to a bank. In addition, you pay interest when you borrow money from a bank. The rate of payment can either be fixed or variable throughout the life of the loan or deposit. The following heads are example of interest/profit account in our XTZ Bank:

 

Interest/profit income:

  • Interest received on SME
  • Interest received on EDF loan
  • Interest received on term loan
  • Profit received on hire purchase
  • Profit received on Bai-Muazzal
  • Profit received on Murabaha
  • Profit received on Quard

 

Interest/profit expenses:

 

  • Interest paid on deposits
  • Interest paid on scheme
  • Interest paid on call loan
  • Interest paid on bank deposit
  • Profit paid on deposit
  • Profit paid on schemes
  • Profit paid on borrowing
  • Profit paid on subordinated debt

Commission A/C: The fee charged for banking services by a financial institution. The following some examples of commission account in our XYZ Bank:

  • Commission on L/C
  • Commission on LG foreign
  • Commission on shipping guarantee
  • Merchant commission
  • Banker to the issue commission
  • Commission on LC amendment
  • Commission on ABP etc.

 

Exchange A/C: of ‘Nostro Account’ is act as an exchange account. A bank account held in a foreign country by a domestic bank, denominated in the currency of that country. Nostro accounts are used to facilitate settlement of foreign exchange and trade transactions.

 

Suspense A/C: Suspense Account in accounting, the section of a company’s books where unclassified debits and credits are recorded. The suspense account temporarily holds unclassified transactions while a decision is being made as to their classification.

 

A suspense account is an account in the general ledger in which amounts are temporarily recorded. The suspense account is used because the proper account could not be determined at the time that the transaction was recorded.

 

All suspense account entry will be adjusted with in 3 (three) months from the date of entry. Otherwise it will be treated as classified and additional provision to be kept in this regard.

The following some examples of suspense account in our XYZ Bank:

  • Advance against TA/DA
  • Sundry debtors
  • DD paid without advice
  • Advance against petty cash

 

Sundry Deposit A/C: A sundry account is a corporate account typically used for recording miscellaneous items which are not clearly identified. The following some examples of sundry deposits account in our XYZ Bank:

  • Margin deposit
  • Pin fees
  • Lease deposit
  • Income tax on various heads
  • VAT on various heads

 

Posting of vouchers: The Voucher Posting process creates accounting entries from vouchers. The system uses the accounting entry template and rules that you set up on the Accounting Entry Template to identify the offset accounts needed to create accounting entries. The entries include the expense distributions entered into the system, as well as additional entries for the payables offset, value-added tax (VAT) expense etc. Vouchers must be entered, approved, and posted before you can send voucher information to the general ledger.

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