STUDY NOTE - 9ACCOUNTING IN SERVICE ORGANISATION
This study note includes
Accounts for Miscellaneous Services
Computer Software Accounting
Accounts of Insurance Companies
Accounts of Banking Companies
Accounts of Electric Supply Companies.
9.1. ACCOUNTS FOR MISCELLANEOUS SERVICE
1.In addition to usual final accounts, contractors prepare different Contract Accounts tofind out cost of each contract, work-in-progress and profit to be considered in case of eachcontract.(1)Accounting ProcedureContract Accounts for different work site are maintained in the Contract Ledger. Materi-als sent to the work site, wages to labourers engaged in that work site and any specialplant purchased for that particular work site are debited to the specific Contract Accountidentified by number or name. Materials may be sent to site by suppliers, or from themain stores or supplied by the Contractee. The overheads are charged to different Con-tract Accounts on the basis of some estimate. When the same plant is used at differentworksites appropriate depreciation on the basis of the period for which it is used in aparticular worksite is debited to that Contract Account.(II) 1.Contract Account should get the credit. On the other hand, if materials are sold out froma worksite, in addition to the credit to that Contract Account, profit or loss on sale of materials is to be transferred from that Contract Account, as this profit or loss should beshared by all contracts i.e., the amount is adjusted with Profit and Loss Account. Simi-larly, for accidental loss the Contract Account is credited as against Loss by AccidentAccount, which is cleared by transfer to Profit and Loss Account to the extent not cov-ered by Insurance Claim.2.At the end of the year the special plant, if any, is carried down at the estimated value, sothat difference between charging price and the price atwhich it is carried down remainscharged in that particular account. Similarly, the materials remaining at site are carrieddown. In addition to these, work certified and the work completed but not certified arecarried down. In the alternative, all these may be transferred to Work-in-Progress Ac-count. Some accountants, however, prefer to carry down materials and plant at site inthe Contract Account itself and to transfer work certified and work not certified to Work-in Progress Account. If Contract Account is given a break before considering certified oruncertified work, upto date cost of contract comes out.