UNIT-IV

DOUBLE ACCOUNTING
Introduction:
Public utility concerns like Electric or Gas companies, water, power, Railways, Tramways etc. which
Operate under special Acts of Parliament enjoy monopolistic rights in their business of rendering services
to the community. These undertakings requires a huge amount of capital which is mostly fixed and sunk.
Hence these undertakings are presented their Balance sheet in two parts.
(1). Capital account
(2). General Balance Sheet
Therefore it is called Double accounting.

Format for Revenue Account

Particulars

Amount

Particulars

Amount

To Cost of Generation

xxx

By Sale of Current

xxx

To Cost of Distribution

xxx

By Rent of Meters

xxx

To Salaries

xxx

To Advertisement

xxx

To Printing

xxx

To Stationery

xxx

To Office expenses

xxx

To Carriage outwards

xxx

To Net profit( tran., to Net Revenue

xxx

Total

xxxx

a/c)
Total

Xxxx

Format for Net Revenue Account

Particulars

Amount

To General reserve

xxx

To Debenture redemption fund

xxx

To Development reserve

xxx

To Proposed bonus

xxx

Particulars
By Balance brought down (bal
b/d)
By Revenue A/c

Amou
nt
xxx
xxx

To Interim dividend

xxx

To Staff gratuity reserve

xxx

To Dividend redemption fund

xxx

To Equity dividend

xxx

To Preference Dividend

xxx

To Deferred Taxation reserve

xxx

To Surplus ( tran., to General B/S)

xxx

Total

Xxxx

Total

xxxx

Format for Capital Account (OR)Receipt & Expenditure Account on Capital A/c
Expenditure

P.Y

C.Y

Total

Receipts

P.Y

C.Y

Total

To Building

xxx

xxx

xxxx

By Equity Shares

xxx

xxx

xxxx

To Machinery

xxx

xxx

xxxx

By Pref., Shares

xxx

xxx

xxxx

To Land

xxx

xxx

xxxx

By Debentures

xxx

xxx

xxxx

To Mains

xxx

xxx

xxxx

To Meters

xxx

xxx

xxxx

To Furniture

xxx

xxx

xxxx

To Cables

xxx

xxx

xxxx

To Lambs

xxx

xxx

xxxx

To Elec., Instruments

xxx

xxx

xxxx

xxxx

xxxx

xxxx

xxxx

xxxx

xxx

xxx

xxx

xxxx

xxxx

xxxx

Total

xxxx

Total
By Balance C/d

Total

xxxx

xxxx

xxxx

Total

Format for General Balance Sheet

Liabilities

Rs

Assets

Rs

Capital A/c-Total receipts

xxx

Capital A/c-Total Expenditures

xxxx

Sundry Creditors

xxx

Stock

xxxx

Net Revenue A/c

xxx

Trade Debtors

xxxx

Depreciation Fund

xxx

Cash in Hand

xxxx

Reserve Fund

xxx

Cash @ Bank

xxxx

Reserve Fund Investment

xxxx

Other Debtors

xxxx

Coal & Oil in Stock

xxxx

Total

xxxx

xxxx

xxxx

REPLACEMENT OF ASSETS

When the replacement does not involves any extensions or improvement over the existing assets:
Particulars

Rs

Cost of New Assets

xxx

(-) Amount realized on Sales of Old Materials

xxx

Old material used in new Assets

Cost of Replacement to be charged to Revenue A/c

xxx
XXX

When the replacement involves any extensions or improvement over the existing assets:

i) The Amount of Replacement to be Capitalized can be ascertained as given below:

Particulars

Rs

Total Cost of New Assets

xxx

(-) Estimated Cost of Replacement

xxx

Cost of Replacement to be capitalized

XXX

ii) The Amount of Replacement cost to be Revenue Account can be ascertained as given below:
Particulars

Rs

Estimated present Cost of Replacement

xxx

(-) Amount Realised on Sale of old assets

xxx

value of old assets material used in new assets

xxx

Cost Of Replacement To Be Charged To Revenue A/c

XXX

iii) Total cost of New Assets can be Ascertain as follows:

Particulars

Rs

Amount spent on New Assets

xxx

(-) value of old assets material used in new assets

xxx

Cost Of Replacement To Be Charged To Revenue A/c

XXX

iv) The Actual Cash Spent on new assets can be determined as follows:
Particulars
Total Actual cost of New Assets

Rs
xxx

(-) value of old assets material used in new assets

xxx
Actual Cash Spent on New Assets

XXX

Journal entries of Replacement of Assets:

i)

For Amount Spent on New Assets:

Particulars

Rs

Replacement A/C Dr

xxx

New Assets A/C

Rs

xxx

To Bank A/C
[ Being Amount Spent on New Assets]

ii)

For Sale of Old Materials:

Particulars
Bank A/C Dr

Rs

Rs

xxx

To Replacement A/C

xxx

[ Being Sold of old Materials]

iii)

For the value of old materials used in the New Assets:

Particulars
Rs
Rs
New Assets A/C Dr

xxx

To Replacement A/C

xxx

[ Being used of old Materials]

iv)

For Amount entirely spent on extensions:

Particulars
New Assets A/C Dr

Rs

Rs

xxx

To Bank A/C

xxx

[ Being Spend on extensions]

v)

For Transfer of balance of replacement A/c To Revenue A/c:

Particulars
Rs
Rs
Revenue A/c Dr
To Replacement A/C
[ Being Transfer of balance of
replacement A/c To Revenue A/c]

xxx
xxx