Finance in Ginesys is an optional module that allows users to keep track of all their earnings and spending and create reports for the various financial transactions recorded in Ginesys.
It creates and maintains masters for Account GroupGroups, Account Class, Ledger, andSub-ledger, etc.
It records transactions like Vouchers and Journal Entries, TDS issues, etc.
The module's extensive capabilities are evident in its document adjustment and bank reconciliation features, which are among the ERP's finest offerings. With this module, users can efficiently handle various tasks such as journal entries, voucher entries, reconciliation, and detailed document-level reporting.
A few important Concepts in Finance
Asset - An asset is a resource that is owned or controlled by a government, corporation, or an individual with the expectation that it will generate a positive economic benefit. An asset can be something that, in the future, can can improve sales, generate cash flow or reduce flow, or reduce expenses, regardless whether it's manufacturing equipment or a patent. Asset can be of two types-
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ii. Current Asset - Current assets are the assets of a organization that are expected to be sold or used as a result of standard business operations over the next year. In other words, it is an asset that is expected to last only for a year or less. It includes Cash, fixed deposit, bank ,accounts receivable etc.
Liability - A liability is something that an individual or organization owes, usually a sum of money. To settle a liability, an individual or a business must transfer the economic benefits which includes goods, money or services.
Income - Income is a gain usually measured in money which an individual or business receives in exchange for providing labor, producing goods or services, or through investing capital. Individuals most often earn income through salary or wages. Businesses earn income through selling goods or services above their cost of production. The income statement provides the retailer with a picture of the organization’s profit and loss situation.
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Credit - Credit is generally defined as a contract agreement between creditor and debtor(borrower) in which the debtor(borrower) receives a sum of money or something of value and repays the lender/seller at a later date, generally with interest (in case of a monetary debt).
Debit - A debit increases asset or expense, and decreases liability or revenue. For instance, if an organization secures a loan to buy machinery, that means fixed assets is debited and simultaneously a liabilities account is credited, based on the type of the loan.
Overdraft - The overdraft allows the account holder of current account to continue withdrawing money even when the account has zero balance in it or has insufficient balance to cover the amount of the withdrawal. It is a type of loan.
Cash - Cash refers to the physical money that a business or a individual has in notes and coins.
Cheque - A Cheque is a document which instructs a bank to pay a particular amount of money from a person's account to another individual's or company's account in whose name the cheque has been made or issued.
TDS - TDS stands for Tax Deducted at Source. TDS is a direct taxation mechanism which was introduced by the Government to collect taxes from the source of income itself or at the time of income payout. Under this mechanism, if a person (deductor) is accountable to make payment to any other person (deductee) then the tax will be deducted at source and remaining balance will be transferred to the deductee. The TDS amount deducted will be forwarded to the Central Government.
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A transaction always need needs two ledgers. One will be debited and another will be credited.
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Sale (Income) ₹5000 (Cr.) → Credit
3. Purchase goods from X (Vendor) Rs.10,000.
Purchase (Expenses) ₹10,000 (Dr.) → Debit
X(Vendor) (Liability) ₹10,000 (Cr.)→ Credit
4. Salary paid to staff via Bank Rs.3000.
Salary (Expenses) ₹3000 (Dr.) → Debit
Bank (Asset) ₹3000 (Cr.)→ Credit
5. Capital introduce via bank Rs.50,000.
Capital (Liability) ₹50,000 (Cr.)→ Credit
Bank (Asset) ₹50,000 (Dr.)→ Debit
6. Motor Cycle purchased via bank Rs.1,30,000.
Motor cycle (Asset) ₹1,30,000 (Dr.)→ Debit
Bank (Asset) ₹1,30,000 (Cr.) → Credit
7. Car repair cost paid in cash Rs.5000.
Car repair cost (Expenses) ₹5000 (Dr.) → Debit
Cash (Asset) ₹5000 (Cr.) → Credit
8. Electricity bill paid in cash Rs.3000.
Electricity bill (Expenses) ₹3000 (Dr.) → Debit
Cash (Asset) ₹3000 (Cr.)→ Credit
9. Income from scrap sale in cash Rs.20,000.
Income from scrap sale (Expenses) ₹20,000 (Cr.)→ Credit
Cash (Asset) ₹20,000 (Dr.) → Debit
10. Depreciation of motor car Rs.4000.
Depreciation (Expenses) ₹4000 (Dr.) → Debit
Motor car (Asset) ₹4000 (Cr.) → Credit
11. Cash deposited in bank Rs.50,000.
Cash (Asset) ₹50,000 (Dr.) → Debit
Bank (Asset) ₹50,000 (Cr.) → Credit
Articles on Finance Forms, Masters and Transactions in Ginesys
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