+2 Computerised Accounting Questions and Answers - Chapter 3

PAYROLL ACCOUNTING

Payroll accounting is the function of calculating and distributing wages, salaries and other allowances to employees

Components of Payroll

1. Earnings
   Earnings include the following:
1. (a) Basic Pay (BP) (b) Dearness Allowance (DA) (c) House Rent Allowance (HRA)
2. (d) Transport Allowance (TA)
3. (e) City Compensatory Allowance (CCA)
4. (f) Other Allowances
   
   Gross Pay = BP+DA+HRA+TA+CCA+Other Allowances
2. Deductions
   Deductions includes:
1. (a) Professional Tax (PT) (b) Provident Fund (PF) (c) Tax Deduction at Source (TDS)
2. (d) Recovery of Loan
3. (e) State Life Insurance (SLI)
4. (f) Other deductions
   
   Net Pay = Gross pay – Total deductions

ASSET ACCOUNTING

Records relating to assets are to be maintained from the acquisition of assets to till its disposal. It mainly involves computation of depreciation

Methods for calculating Depreciation

1. Straight Line Method (Fixed instalment Method)

In this method, depreciation is calculated on the basis of original cost of the asset. In LibreOffice Calc, SLN Function is used to find depreciation under Straight Line Method

Syntax : =SLN(Cost,Salvage,Life)

• Cost – Acquisition cost
• Salvage – Scrap value
• Life – Total life period of asset

2. Diminishing Balance Method (Written Down Value Method)

In this method, depreciation is calculated on the basis of opening balance of the asset each year. In LibreOffice Calc, DB function is used for calculating depreciation under this method

Syntax : =DB(Cost,Salvage,Life,Period,Month)

• Cost – Acquisition cost
• Salvage – Scrap value
• Life – Total life period of asset
• Period – Period (Year) for which depreciation is to be calculated
• Month – Number of months in first year
  (It is required only if the asset is put to use during part of a year in first year)