Re: Accounting Entries and Taxation for Stocks & F&O-A thread for settling these issu
Sunil
Hats off to you ;-)
I never expected such a fast & thorough response to my post. I am going to print all this take a pencil and mark clarifications & queries for you and anyone to answer & comment upon.
So much material cannot be absorbed immediately and I'm not even gonna try!
Off the top of my head, and mind you from logical point of view only...no legal knowledge about it...I have one question only at this stage. I hope you will answer it with your thoroughness.
Purchase/Sale and Payment are two parts of a transaction. In case of an option, I can understand treating just the amount paid as the transaction amount.
But in case of futures or Intraday Shares, the Purchase or Sale amount is the amount of shares cost or the cost of the entire futures contract, regardless that you have done the transaction by paying margin money or you have paid off the purchase amount with the sale amount and during the transaction got a profit or a loss.
I would think that Sale/Purchase Amount would go to the Sale/Purchase heads and other side to the payables & receivables and margin deposit would be debited to the broker. All these entries to be setoff against a closing trade entry.
How else would you compute Sales of a trading firm? Mind it, question is about a trading firm only.
And regarding other questions, I am going to eat a lot of Badaams and have an oil massage and then I will sit and tackle your postings :clapping: