Meaning The term ‘Sundry creditors’ consist of two words: ‘Sundry’ and ‘creditors’. The word ‘sundry’ means the items which are not significant enough to be named separately. It also refers to a collection of miscellaneous items. Creditors are the person from whom money is borrowed or goods are puRead more
Meaning
The term ‘Sundry creditors’ consist of two words: ‘Sundry’ and ‘creditors’.
The word ‘sundry’ means the items which are not significant enough to be named separately. It also refers to a collection of miscellaneous items.
Creditors are the person from whom money is borrowed or goods are purchased on credit by a business or a non-business entity. They have to be repaid after a period of time which is usually less than or up to one year.
By combining the meaning of both words, ’sundry’ and ‘creditor’, the term ‘sundry creditor’ will refer to the collection of insignificant creditors of an entity.
Back in the days when accounting records were maintained on paper, only the records of those creditors were maintained separately, from whom goods are purchased regularly and in large amounts.
But there used to be numerous other creditors with whom the transactions were occasional and insignificant. To reduce the paperwork, records of all such creditors were maintained on a single page or book under the head ‘Sundry Creditors’
Nowadays, as accounting records are maintained digitally, hence maintaining records of each and every creditor is not a problem.
Hence, every creditor whether small or big, is grouped under the head ‘Sundry creditor’ or ‘Trade Creditor’.
Accounting Treatment
Sundry creditors are the persons to whom a business owes money.
Hence, as per golden rules of accounting, Sundry creditor is a personal account and the golden rule for personal account is, ‘Debit the receiver and credit the giver’
We know sundry creditors are liabilities, hence, as per modern rule of accounting, sundry creditors are credited in case of increase and debited in case of decrease.
Example, a business purchased goods for Rs. 10,000 from ABC & Co. The journal entry will as follows:
Here, ABC & Co is the creditor. It is credited as it is a personal account and the creditor has given the goods to the business, hence the giver is credited.
From point of view of modern rules of accounting, ABC & Co. is a creditor, a liability. On purchase of goods on credit, a liability is created. Hence, ABC & Co A/c is credited.
Balance sheet
Sundry creditor is a current liability, so it is shown on the liabilities side of a balance sheet. Trade payable and accounts payable mean sundry creditors only.
Introduction Like, in the case of excise duty, the taxable event is the manufacture of goods, supply is a taxable event with respect to the Goods and Services Tax regime in India. A taxable event is an event on occurrence of which tax is charged. Excise duty is charged when any specified good is manRead more
Introduction
Like, in the case of excise duty, the taxable event is the manufacture of goods, supply is a taxable event with respect to the Goods and Services Tax regime in India. A taxable event is an event on occurrence of which tax is charged.
Excise duty is charged when any specified good is manufactured, GST is charged when any good or service is supplied.
Definition of Supply
The concept of supply is of great significance to the GST architecture. It can be called the ‘bones to the body of GST’.
Section 7 of the CGST defines ‘supply’.
At first, I have provided the whole Section 7 which consists of four sub-sections:
Thereafter will be the explanation of each sub-section in simple language.
Section 7
Section 7(1) of the CGST Act, 2017 defines ‘supply’. As per section 7(1) of the CGST Act, 2017, the supply includes:
Section 7(1A) states, ‘where certain activities or transaction constitute as supply in accordance of with the provisions of sub-section (1), they shall be treated either as a supply of good or supply of services as referred to Schedule II.
Section 7(2) states, ‘notwithstanding with anything contained in sub-section (1).
shall not be treated neither as a supply of goods nor a supply of services.
Section 7(3) states ‘subject to sub-section (1), (1A) and (2), the government may, on the recommendation of the council specify, by the notification, the transaction that is treated as :
Explanation of Section 7 in simple terms.
Section 7(1) (a) sets three parameters of an activity or transaction to be a supply.
Any activity or transaction will be treated as a supply if the above parameters are fulfilled as per sub-section (1) clause (a).
Section 7(1)(b) is actually an exception to the 3rd parameter of supply. Import of service for a consideration will be considered a supply even if it is not made in furtherance of business,
Section 7(1)(c) states that item in the schedule I will be treated as supply whether there is consideration or not. This is an exception to the 2nd parameter.
Section 7(1A) states any activity which is a supply as per sub-section (1), shall be classified either as a supply of goods or as a supply of service as per schedule II. There are many activities and transactions which have the characteristics of both goods and services.
For example, dining in a restaurant. Schedule II helps to eliminate this confusion and helps to classify such activities or transactions as either supply of goods or supply of services. As per Schedule II, dining or take-away from a restaurant is a supply of service.
Section 7(2) states the activities which are neither supply of goods nor neither of services even if they fulfilled the condition of the sub-section (1).
Section 7(3) says that the central government have the power to notify transactions that are to be treated as supply of goods nor as a supply of service or supply of services not as a supply of services
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