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Bangalore University B.com Notes

Spreadsheet for Business Bangalore University B.com 1st Semester NEP Notes

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Unit 1 Introduction {Book}
Introduction to spreadsheets, Office Suite overview VIEW VIEW
Basic Text and cell formatting VIEW
Basic Arithmetic calculation, Special paste, Freeze pane VIEW
Auto completion of Series, Sort and filter, Charts VIEW

 

Unit 2 Summarize data using functions {Book}
Perform calculations by using the SUM function VIEW
Perform calculations by using MIN and MAX function VIEW
Perform calculations by using the COUNT function VIEW
Perform calculations by using the AVERAGE function VIEW
Perform logical operations by using the IF function VIEW
Perform logical operations by using the SUMIF function VIEW
Perform logical operations by using the AVERAGEIF function VIEW
Perform statistical operations by using the COUNTIF function VIEW

 

Unit 3 Text Functions {Book}
Data validation VIEW
Text Functions: LEN, TRIM, PROPER, UPPER, LOWER, CONCATENATE VIEW

 

Bangalore University B.com Notes

Principles of Marketing Bangalore University B.com 1st Semester NEP Notes

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Unit 1 Introduction to Marketing {Book}
Introduction to Marketing VIEW
Fundamentals of Marketing, Scope of Marketing VIEW
Importance of Marketing VIEW
Elements of Marketing Mix VIEW
Approaches of Marketing VIEW
Analyzing the Marketing Environment: Components of Environment VIEW
Micro Environment VIEW
Macro Environment: Environment specific to the firm; Global Environment, Consumer environment, Technology environment, Competition environment VIEW
Value Philosophy in Marketing: Understanding the value philosophy, Meaning of value; Value Creation and Delivery VIEW
Value Delivery Process VIEW
Value Delivery and Upstream Marketing VIEW
Value Innovation; Co-creation of value VIEW

 

Unit 2 Consumer Behaviour & Market Segmentation {Book}
Consumer Behaviour Introduction VIEW
Factors influencing Consumer Behaviour VIEW
Buying Decision Process VIEW
Theories of Consumer Decision Making VIEW VIEW
Marketing Research Key terms and VIEW
Process & Techniques of market research VIEW
Role of Market Research in the decision-making system VIEW
Market Segmentation VIEW VIEW
Targeting VIEW
Differentiation VIEW
Positioning VIEW VIEW
Levels of Segmentation VIEW
Basis for Segmenting Consumer VIEW
Basis for Segmenting Business Markets VIEW
Market Targeting, Developing VIEW
Communicating Strategy VIEW
Positioning Strategy VIEW VIEW
VIEW VIEW

 

Unit 3 Product and Pricing Strategy {Book}
Product Levels; Classifying products VIEW
Product Range VIEW
Product Line VIEW
Product Mix VIEW
Product Life Cycles VIEW
New Product Development VIEW
New Service Development VIEW
Stages of Product Development; VIEW
Product Adoption Process VIEW VIEW
Pricing to Capture Value: VIEW
Pricing Environment VIEW
Consumer Psychology & Pricing VIEW
Pricing Philosophy VIEW
Methods of Pricing VIEW VIEW
Price Adaptations VIEW
Initiating Price Changes VIEW
Responding to Competitors’ Price Changes VIEW

 

Unit 4 Marketing Channels & Promotional Strategy {Book}
Marketing channels, Functions VIEW
Physical Distribution VIEW
Value Networks VIEW
Channel Design Decisions VIEW
Channel Management Decisions VIEW
Channel Integration and Systems VIEW VIEW
E-commerce VIEW VIEW
E- Retailing VIEW
Promoting Value:
Marketing Communications VIEW
Personal Influencers VIEW
Marketing Communications Mix VIEW
Advertising VIEW VIEW
Sales Promotion VIEW VIEW
Personal Selling VIEW VIEW
Direct Marketing VIEW VIEW
Public Relations VIEW VIEW

 

Unit 5 Advancements in Marketing {Book}
Social Marketing VIEW VIEW
Online Marketing VIEW
Search Engine Optimization (SEO) VIEW
Green marketing VIEW
Rural Marketing VIEW
Mobile Marketing VIEW
Marketing Analytics VIEW
Social Media Marketing VIEW
Email Marketing VIEW VIEW
Live Video Streaming Marketing VIEW
Network Marketing VIEW
Affiliate Marketing VIEW
Chatbots Marketing VIEW
Influencer Marketing VIEW
Global Marketing VIEW
Experiential Marketing VIEW
Relationship Building and Customer Retention VIEW VIEW
Strategic Alliances and Networks VIEW

 

Bangalore University B.com Notes

Digital Fluency Bangalore University B.com 1st Semester NEP Notes

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Unit 1 Fundamentals of Computer {Book}
Introduction, Objectives, Computer, Mobile/Tablet VIEW VIEW
Application of Computer VIEW
Components of a Computer System, Central Processing Unit VIEW
Input devices: Connecting Power cord, Keyboard, Mouse, USB ports and Pen Drive VIEW VIEW
Output devices: Monitor and Printer to CPU VIEW

 

Unit 2 Word Processor {Book} No Update

 

Unit 3 Internet {Book}
Internet Introduction, Objectives, Applications VIEW
Internet Protocols: HTTP, HTTPS, FTP VIEW
Concept of Internet & WWW VIEW
Website Address and URL VIEW
Modes of Connecting Internet (Hotspot, Wi-Fi, LAN Cable, Broadband, USB Tethering) VIEW
Popular Web Browsers (Internet Explorer/Edge, Chrome, Mozilla Firefox) VIEW
Exploring the Internet, Surfing the web VIEW
Searching on Internet VIEW

 

Unit 4 E-mail {Book}
E-mail Introduction, Objectives, Structure VIEW
Protocols: SMTP, IMAP, POP3 VIEW
No More Update

 

Bangalore University B.com Notes

Business Management & Startups Bangalore University B.com 1st Semester NEP Notes

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Unit 1 Principles & Functions of Management {Book}
Introduction, Meaning, Definitions, Importance & Scope of management VIEW
Principles of Management VIEW
Managerial Functions: Meaning, Definition, Characteristics VIEW
Benefits & Limitations of Planning VIEW
Benefits & Limitations of Organizing VIEW
Benefits & Limitations of Directing VIEW
Benefits & Limitations of Coordinating VIEW
Benefits & Limitations of Controlling VIEW
Task & Responsibilities of Professional Manager VIEW

 

Unit 2 Leadership & Motivation {Book}
Leadership: Concept, Importance VIEW
Major Theories of Leadership:
Likert’s scale Theory, Fred Fielder’s Situational leadership VIEW
Blake & Mouton’s Managerial Grid theory VIEW
House Path Goal theory VIEW
Modern Leadership styles in the changing world (Charismatic leadership, Transformational leadership, Visionary Leadership, Transactional Leadership, Servant Leadership, Situational Leadership). VIEW
Motivation: Concept & Importance of Motivation VIEW
Contemporary Motivation Theories
Expectancy Theory VIEW
Equity Theory VIEW
Goal Setting Theory VIEW
Reinforcement theory VIEW

 

Unit 3 Startups & Its Financial Issues {Book}
Startups Introduction, Meaning, Features, Types, Ideation VIEW
Design Thinking VIEW
Entrepreneurship Lessons for Startups VIEW
3 Pillars to Initiate startup (Handholding, Funding & Incubation) VIEW
Startup Financial issues VIEW
Feasibility Analysis: The cost & Process of Raising capital VIEW
Unique Funding issues of a High-tech Ventures:
Funding with equity VIEW
Financing with debt VIEW
funding strategies with bootstrapping VIEW
Crowdfunding VIEW
Venture Capital VIEW

 

Unit 4 Incubation Support to Startups {Book}
Introduction, Meaning & Definition of Incubation Support, Services Types VIEW
Objectives & Functions of Incubation Centers VIEW
Incentives for Incubators VIEW
Role of Incubators in startup Policy VIEW
List of Major Startups Incubators in India VIEW
Case studies on Startups

 

Unit 5 Government Initiatives for Startups in India {Book}
Government Initiatives, Startup India Initiative VIEW
Seed Fund, ASPIRE VIEW
SAMRIDDHI Scheme VIEW
Mudra Scheme (Sishu, Kishore & Tarun) VIEW
ATAL Innovation Mission VIEW
MSME Multiplier Grants Scheme VIEW
Credit Guarantee fund Trust for micro & Small business VIEW
Software Technology Park VIEW
Venture Capital Assistance Scheme VIEW
Single Point Registration scheme VIEW
M-SIPS, Self-Employment & Talent Utilization (SETU) VIEW

 

Bangalore University B.com Notes

Financial Accountancy Bangalore University B.com 1st Semester NEP Notes

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Unit 1 Introduction to Accountancy
Accountancy Introduction, Meaning, Definition of Accounting VIEW VIEW
Uses & Users of Accounting VIEW
Accounting Principles VIEW
Accounting process VIEW
Types of Reconciliation (Concepts) VIEW VIEW
Recognition of Capital & Revenue VIEW
Problems on Accounting Equation (Operating in Spreadsheet) VIEW
Unit 2 Consignment Accounts
Consignment Accounts Introduction, Meaning of Consignment VIEW
Consignment Vs Sales VIEW
Proforma Invoice, Accounts Sales, Types Commission VIEW
Accounting for Consignment Transactions & Events in the books of Consignor only VIEW
Treatment of Normal & Abnormal Loss VIEW
Valuation of Closing Stock VIEW
Goods sent at Cost Price VIEW
Goods sent at Invoice Price VIEW
Unit 3 Accounting for Branches
Introduction, Meaning, Objectives, Types of Branches VIEW VIEW
Meaning and features of Branches VIEW
Meaning and features of Dependent Branches VIEW
Independent Branches, Foreign Branches VIEW
Methods of Maintaining books of Accounts by Head office VIEW
Meaning & Feature of Debtor system, stock & Debtor system VIEW
Wholesale branch system and Final Account system VIEW
Supply of Goods at Cost Price VIEW
Supply of Goods at Invoice Price VIEW
Unit 4 Leasing & Hire Purchase
Leasing, Elements of lease, Major Components of Lease Agreement, VIEW
Types of Leasing VIEW
Leasing Financial institution in India. (Theory) VIEW
Meaning of Hire Purchase and Instalment Purchase System difference between Hire Purchase and Instalment Purchase VIEW VIEW
Important Definitions: Hire Purchase Agreement VIEW
Hire Purchase Price VIEW
Hire Purchase Charges VIEW
Net Hire Purchase Price VIEW
Cash Price, Net Cash Price VIEW
Calculation of Interest VIEW
Calculation of Cash Price VIEW
Journal Entries and Ledger Accounts in the books of Hire Purchaser (Asset Accrual Method only). VIEW
Unit 5 Emerging Trends in Accounting
Digital Transformation of Accounting VIEW
Big Data Analytics in Accounting VIEW
Accounting through Cloud Computing VIEW
Green Accounting VIEW VIEW
Human Resource Accounting VIEW
Inflation Accounting VIEW
Database Accounting VIEW

 

University of Mumbai BMS Notes

Comptroller and Auditor General of India (CAG)

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The Comptroller and Auditor General of India is the Constitutional Authority in India, established under Article 148 of the Constitution of India. He is empowered to Audit all receipts and expenditure of the Government of India and the State Governments, including those of autonomous bodies and corporations substantially financed by the Government. The CAG is also the statutory auditor of Government-owned corporations and conducts supplementary audit of government companies in which the Government has an equity share of at least 51 per cent or subsidiary companies of existing government companies. The reports of the CAG are laid before the Parliament/Legislatures and are being taken up for discussion by the Public Accounts Committees (PACs) and Committees on Public Undertakings (COPUs), which are special committees in the Parliament of India and the state legislatures. The CAG is also the head of the Indian Audit and Accounts Department, the affairs of which are managed by officers of Indian Audit and Accounts Service, and has 43,576 employees across the country (as on 01.03.2020).

In 1971, the central government enacted the Comptroller and Auditor General of India (Duties, Powers, and Conditions of Service) Act, 1971. In 1976, CAG was relieved from accounting functions.

Articles 148–151 of the Constitution of India deal with the institution of the CAG of India.

Duties of the CAG

As per the provisions of the constitution, the CAG’s (DPC) (Duties, Powers and Conditions of Service) Act, 1971 was enacted. As per the various provisions, the duties of the CAG include the audit of:

  • Receipts and expenditure from the Consolidated Fund of India and of the State and Union Territory having legislative assembly.
  • Trading, manufacturing, profit and loss accounts and balance sheets, and other subsidiary accounts kept in any Government department; Accounts of stores and stock kept in Government offices or departments.
  • Government companies as per the provisions of the Companies Act, 2013.
  • Corporations established by or under laws made by Parliament in accordance with the provisions of the respective legislation.
  • Authorities and bodies substantially financed from the Consolidated Funds of the Union and State Governments. Anybody or authority even though not substantially financed from the Consolidated Fund, the audit of which may be entrusted to the CAG.
  • Grants and loans given by Government to bodies and authorities for specific purposes.
  • Entrusted audits e.g. those of Panchayati Raj Institutions and Urban Local Bodies under Technical Guidance & Support (TGS).

Scope of audits

Audit of government accounts (including the accounts of the state governments) in India is entrusted to the CAG of India who is empowered to audit all expenditure from the Consolidated Fund of the union or state governments, whether incurred within India or outside, all revenue into the Consolidated Funds and all transactions relating to the Public Account and the Contingency Funds of the Union and the states. Specifically, audits include:

  • Transactions relating to debt, deposits, remittances, Trading, and manufacturing.
  • Profit and loss accounts and balance sheets kept under the order of the President or Governors.
  • Receipts and stock accounts. CAG also audits the books of accounts of the government companies as per Companies Act.

In addition, the CAG also executes performance and compliance audits of various functions and departments of the government. Recently, the CAG as a part of thematic review on “Introduction of New Trains” is deputing an auditors’ team on selected trains, originating and terminating at Sealdah and Howrah stations, to assess the necessity of their introduction. In a path-breaking judgement, the Supreme Court of India ruled that the CAG General could audit private firms in revenue-share deals with government.

Roles of CAG

  • The CAG has to ascertain whether the money spent was authorised for the purpose for which they were spent.
  • The CAG is an agent of the Parliament and conducts audits of expenditure on behalf of the Parliament. Therefore, he is responsible only to the Parliament.
  • He focuses on whether the expenditure made is in the public interest or not.
  • Some corporations are audited directly by the CAG. For example, ONGC, Air India, and others.
  • The role of CAG in the auditing of public corporations is limited.
  • The role of the CAG in the auditing of Government Companies is also limited. They are audited by private auditors who are appointed by the Central Government on the advice of the CAG.
  • Some corporations are audited by private professional auditors who are appointed by the Central Government in consultation with CAG. If necessary, there may be a supplementary audit by CAG.
Management Notes

Central Vigilance Commission (CVC)

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Central Vigilance Commission (CVC) is an apex Indian governmental body created in 1964 to address governmental corruption. In 2003, the Parliament enacted a law conferring statutory status on the CVC. It has the status of an autonomous body, free of control from any executive authority, charged with monitoring all vigilance activity under the Central Government of India, advising various authorities in central Government organizations in planning, executing, reviewing and reforming their vigilance work.

It was set up by the Government of India Resolution on 11 February 1964, on the recommendations of the Committee on Prevention of Corruption, headed by Shri K. Santhanam Committee, to advise and guide Central Government agencies in the field of vigilance. Nittoor Srinivasa Rau, was selected as the first Chief Vigilance Commissioner of India.

The Annual Report of the CVC not only gives the details of the work done by it but also brings out the system failures which leads to corruption in various Departments/Organisations, system improvements, various preventive measures and cases in which the commissions advise were ignored etc.

The Commission shall consist of:

  • A Central Vigilance Commissioner: Chairperson.
  • Not more than two Vigilance Commissioners: Members.

Role

The CVC is not an investigating agency: the only investigation carried out by the CVC is that of examining Civil Works of the Government.

Corruption investigations against government officials can proceed only after the government permits order. The CVC publishes a list of cases where permissions are pending, some of which may be more than a year old.

The Ordinance of 1998 conferred statutory status to the CVC and the powers to exercise superintendence over the functioning of the Delhi Special Police Establishment, and also to review the progress of the investigations on alleged offences under the Prevention of Corruption Act, 1988 conducted by them. In 1998 the Government introduced the CVC Bill in the Lok Sabha to replace the Ordinance, though it was not successful. The Bill was re-introduced in 1999 and remained with the Parliament until September 2003, when it became an Act after being duly passed in both the Houses of Parliament. The CVC has also been publishing a list of corrupt government officials against which it has recommended punitive action. In 2004, GoI authorized the CVC as the “Designated Agency” to receive written complaints for disclosure on any allegation of corruption or misuse of office and recommend appropriate action. This report delivers to the president.

Function:

  • To undertake an inquiry or cause an inquiry or investigation to be made into any transaction in which a public servant working in any organization, to which the executive control of the Government of India extends, is suspected or alleged to have acted for an improper purpose or in a corrupt manner;
  • To exercise a general check and supervision over vigilance and anti-corruption work in Ministries or Departments of the Government of India and other organizations to which the executive power of the Union extends.
  • To tender independent and impartial advice to the disciplinary and other authorities in disciplinary cases, involving vigilance angle at different stages i.e. investigation, inquiry, appeal, review etc.
  • To undertake or cause an inquiry into complaints received under the Public Interest Disclosure and Protection of Informer and recommend appropriate action.
  • The Central Government is required to consult the CVC in making rules and regulations governing the vigilance and disciplinary matters relating to the members of Central Services and All India Services.
  • Respond to Central Government on mandatory consultation with the Commission before making any rules or regulations governing the vigilance or disciplinary matters relating to the persons appointed to the public services and posts in connection with the affairs of the Union or to members of the All-India Services.

Purpose

  • The main purpose for which this important body had been established was to ensure all sorts of corruptions in government sector could be well prevented and addressed minutely.
  • Its major role is to recommend government agencies in “Planning, executing, reviewing and reforming” their vigilance capability.
  • It is an autonomous body, responsible for monitoring all vigilance activities under the union government.
  • Central Government of India formed CVC in the year 1964 as an important body that could take into account the measures and steps to prevent all the corruptions especially the governmental ones for a better system and governance.
Management Notes

Role and functions in Public Account Audits

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In India, the parliamentary form of government is in force, the legislature has the power to ensure “That the appropriated money is spent economically, judiciously and for the purpose for which it was sanctioned”.

Even though the Comptroller and Auditor General of India is to audit the accounts of the government and to ensure the propriety of the money spent, yet his report is further examined by the special committee of the parliament, is known as Public Account Committee (РАС).

Functions:

  1. The main function of the committee is examination of the accounts and report of the Comptroller and Auditor General in order to ensure that the appropriations sanctioned by the parliament are spent by the executive authorities, “within the scope of the demand. It means that,

(a) Expenditure should not exceed the appropriation made by the parliament,

(b) That the expenditure has been incurred for the purpose for which it was voted by the Parliament,

(c) That amount has been spent by the officials, who are legally authorised to spend the money,

(d) That the executive has not overlooked the vote of parliament by adjusting expenditure in excess of a grant of another vote whose a saving has occurred.

  1. The second function of the committee extends beyond the formality of expenditure to its wisdom, faithfulness and economy. It means that the committee is not only to examine that money has been spent according to the rules and regulations, but it is also to see that the approved policy has been implemented by the executive authorities with maximum efficiency and economy.
  2. The third function of the committee is to examine the technicalities of the procedure employed in maintaining the accounts. In order to discharge these functions, the committee can send for persons, papers and records for evidence purpose. The committee reports its opinion and reservations and comments on items under consideration, but it has no power to disallow any items of expenditure.
  3. Finally, it is provided in the rules of procedure that the functions of the committee shall also extend in following cases:

(a) To examine the income and expenditure statement of state corporations, trading and manufacturing schemes, corners and projects.

(b) To examine the statement of accounts of autonomous and semi-autonomous bodies.

(c) To examine the accounts of those stores and stocks where the audit has been conducted by the Comptroller and Auditor General.

Procedure:

The committee conducts scrutiny by putting questions to the official’s witness. In conducting the major role of committee’s deliberation the chairman plays the most important role. The chairman, briefed by the Comptroller and Auditor General and the Secretary of the Committee takes the lead in putting questions to the official witnesses.

The official witnesses also come with full preparation to provide full knowledge of the problem to be Committee. The meetings of the committee are private and every care is taken to keep the secrecy of the witness.

After the examination of official witnesses, the committee sits down to discuss the framework of its report. When the thorough discussion is over the committee prepares its report, which contains recommendations and findings of the committee.

The report is generally prepared by the parliament secretariat, with guidance of the chairman and is sent to the Comptroller and Auditor-General for factual verification. After verification, the report is again considered by the committee.

Thereafter it is presented to the parliament for by the chairman acceptance. Sometimes the committee also functions through its sub-committee to study some special problems. The sub-committee submits its report to the committee.

After thorough considerations of the committee, the report is prepared on the basis of the facts placed before it. Then the committee submits the report with its recommendations to the house.

Management Notes

E-Applications in internal control and check

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Relevant auditing standards

References will be made throughout this article to the most recent guidance in standards:

  • ISA 300 (Redrafted) Planning an Audit of Financial Statements
  • ISA 315 (Redrafted) Identifying and Assessing the Risks of Material Misstatement Through Understanding the Entity and Its Environment
  • ISA 330 (Redrafted) The Auditor’s Responses to Assessed Risks.

Internal controls in a computer environment

The two main categories are application controls and general controls.

Application controls

These are manual or automated procedures that typically operate at a business process level and apply to the processing of transactions by individual applications. Application controls can be preventative or detective in nature and are designed to ensure the integrity of the accounting records.

Accordingly, application controls relate to procedures used to initiate, record, process and report transactions or other financial data. These controls help ensure that transactions occurred, are authorised and are completely and accurately recorded and processed (ISA 315 (Redrafted)).

Application controls apply to data processing tasks such as sales, purchases and wages procedures and are normally divided into the following categories:

(i) Input controls

Examples include batch control totals and document counts, as well as manual scrutiny of documents to ensure they have been authorised. An example of the operation of batch controls using accounting software would be the checking of a manually produced figure for the total gross value of purchase invoices against that produced on screen when the batch-processing option is used to input the invoices. This total could also be printed out to confirm the totals agree.

The most common example of programmed controls over the accuracy and completeness of input are edit (data validation) checks when the software checks that data fields included on transactions by performing:

  • Reasonableness check, eg net wage to gross wage
  • Existence check, eg that a supplier account exists
  • Character check, eg that there are no alphabetical characters in a sales invoice number field
  • Range check, eg no employee’s weekly wage is more than $2,000
  • Check digit, eg an extra character added to the account reference field on a purchase invoice to detect mistakes such as transposition errors during input.

When data is input via a keyboard, the software will often display a screen message if any of the above checks reveal an anomaly, eg ‘Supplier account number does not exist’.

(ii) Processing controls

An example of a programmed control over processing is a run-to-run control. The totals from one processing run, plus the input totals from the second processing, should equal the result from the second processing run. For instance, the beginning balances on the receivables ledger plus the sales invoices (processing run 1) less the cheques received (processing run 2) should equal the closing balances on the receivable ledger.

(iii) Output Controls

Batch processing matches input to output, and is therefore also a control over processing and output. Other examples of output controls include the controlled resubmission of rejected transactions, or the review of exception reports (eg the wages exception report showing employees being paid more than $1,000).

(iv) Master files and Standing data controls

Examples include one-for-one checking of changes to master files, eg customer price changes are checked to an authorised list. A regular printout of master files such as the wages master file could be forwarded monthly to the personnel department to ensure employees listed have personnel records.

General controls

These are policies and procedures that relate to many applications and support the effective functioning of application controls. They apply to mainframe, mini-frame and end-user environments. General IT controls that maintain the integrity of information and security of data commonly include controls over the following:

  • Data centre and network operations
  • System software acquisition, change and maintenance
  • Program change
  • Access security
  • Application system acquisition, development, and maintenance (ISA 315 (Redrafted))

‘End-user environment’ refers to the situation in which the users of the computer systems are involved in all stages of the development of the system.

(i) Administrative controls

Controls over ‘data centre and network operations’ and ‘access security’ include those that:

  • Prevent or detect errors during program execution, eg procedure manuals, job scheduling, training and supervision; all these prevent errors such as using wrong data files or wrong versions of production programs
  • Prevent unauthorised amendments to data files, eg authorisation of jobs prior to processing, back up and physical protection of files and access controls such as passwords
  • Ensure the continuity of operations, eg testing of back – up procedures, protection against fire and floods.

(ii) System development controls

The other general controls referred to in ISA 315 cover the areas of system software acquisition development and maintenance; program change; and application system acquisition, development and maintenance.

‘System software’ refers to the operating system, database management systems and other software that increases the efficiency of processing. Application software refers to particular applications such as sales or wages. The controls over the development and maintenance of both types of software are similar and include:

  • Controls over application development, such as good standards over the system design and program writing, good documentation, testing procedures (eg use of test data to identify program code errors, pilot running and parallel running of old and new systems), as well as segregation of duties so that operators are not involved in program development
  • Controls over program changes: To ensure no unauthorised amendments and that changes are adequately tested, eg password protection of programs, comparison of production programs to controlled copies and approval of changes by users
  • Controls over installation and maintenance of system software: Many of the controls mentioned above are relevant, eg authorisation of changes, good documentation, access controls and segregation of duties.
Management Notes

Payment to Creditors

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The term creditor can mean different things depending on the situation, but it typically means a financial institution or person who is owed money.

If you’re the person who owes the money to a creditor, you may be referred to as a debtor or borrower.

Once a borrower and lender agree on terms for financing and sign a loan agreement, they’re entering into a contract. That contract often specifies the repayment agreement terms of the loan and the expected payment amounts.

You may hear the terms lender and creditor used interchangeably. The same goes for borrower and debtor. But you’ll more likely hear creditor and debtor used during legal proceedings where a creditor is trying to collect on an outstanding balance, such as during a bankruptcy case.

There are several types of creditors, such as real creditors, personal creditors, secured creditors and unsecured creditors.

Personal creditors: These are friends or family you owe money.

Real creditors: A real creditor is a financial institution, such as a bank or credit card issuer, that has a right to be repaid.

Secured creditors: These lenders have a legal right often through a lien to property you used as collateral to secure the loan.

Unsecured creditors: A credit card issuer is a good example of this type of creditor. You may owe money, but it’s unsecured debt, meaning you haven’t agreed to give the creditor any property such as a car or home as collateral to secure your debt.

Ex.

Auto loans: Similar to a mortgage, an auto loan is a loan that someone takes out in order to purchase a vehicle.

Mortgage: A mortgage is a loan you take out from a financial institution to purchase a house. In this case, the creditor would be the financial institution that provides the borrower with the mortgage loan.

Credit cards: Credit cards offer a revolving credit line with a specified credit limit. The credit card issuer that extended the credit line could be the creditor if you have an outstanding balance.

Student loans: Students who cannot afford the cost of tuition on their own can apply for financial aid, including student loans to cover expenses such as tuition, housing and books. When the time comes to repay the student loan, payments are made to the creditor.

Personal Loans: A personal loan is a loan often unsecured that can help you pay for a big project like home improvements or to consolidate debt. If you have an outstanding balance on the personal loan, the creditor is likely the lender that issued the loan.

The company can make the payment to creditors journal entry by debiting the payables account and crediting the cash account.

  • If we pay creditor through cheque, then the journal entry will be

Creditor A/C Dr

To, Bank A/C

(Being creditors paid through cheque)

  • If we pay creditor through cash, then the journal entry will be

Creditor A/C Dr

To, Cash A/C

Account Debit Credit
Payables ₹₹₹
Cash ₹₹₹

Payable account here can be accounts payable, note payable, loan payable, or other types of payables depending on the type of debts the company has as well as the name of the ledger account in the chart of accounts for the credit it owes.

For example, when the company borrows the money from the bank, it may record the debt as note payable or loan payable for the liability it owes to the bank. On the other hand, if the company purchases goods on credit from its supplier, it may record the liability as the accounts payable or the trade payable depending on which one it deems.

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