Project Report

Advanced Accountancy M.
Com – Ⅰ “On The Job Training Report”
PROJECT REPORT
ON
“A STUDY ON REVENUE
INCOME AND EXPENDITURE ANALYSIS
OF BHARAT MEDICAL STORE”
SUBMITTED TO
HIRACHAND NEMCHAND COLLEGE OF COMMERCE, SOLAPUR

(AUTONOMOUS COLLEGE)
AFFILIATED TO PUNYSHLOK AHILYADEVI HOLKAR SOLAPUR
UNIVERSITY, SOLAPUR
MASTER OF COMMERCE
IN
ADVANCED ACCOUNTANCY
BY
MISS. AVANTIKA CHANDRASH ANVEKAR

(M.Com)
UNDER THE GUIDANCE
Dr. V.S. HASABNIS
(M.com, MBA, DLL, M.PHiL, PhD)
SUBMITTED
THROUGH
THE PRINCIPAL
HIRACHAND NEMCHAND COLLEGE OF COMMERCE, SOLAPUR
(AUTONOMOUS COLLEGE)
APRIL / MAY, 2024
Hirachand nemchand college of commerce ,solapur (autonomous college)

Advanced Accountancy M.Com – Ⅰ “On The Job Training Report”
CERTIFICATE
This is to certify that the OJT Report entitled “A STUDY ON REVENUE INCOME AND
EXPENDITURE ANALYSIS ON BHARAT MEDICAL STORE” being submitted
herewith by “MISS AVANTIKA CHANDRASH ANVEKAR” “PRN NUMBER:
23204001011 from the Branch Master of Commerce in Advanced Accountancy of
Hirachand Nemchand College of Commerce, Solapur (Autunomous College),
AFFILIATED TO PUNYASHLOK AHILYADEVI HOLKAR SOLAPUR
UNIVERSITY, SOLAPUR . Under my guidance is an original work and has not being
copied from any other source to the best of my knowledge and belief.
The work embodied in this report has not been presented earlier for the award of any degree
or diploma or membership either to this or any other institute or university.
Project Guide Name
Dr. V.S. Hasabnis
Place : Solapur
Date :

DECLARATION
I, The undersigned hereby declare that the OJT Report entitled “ A STUDY ON REVENUE
INCOME AND EXPENDITURE ANALYSIS ON BHARAT MEDICAL STORE “ ,
written and submitted by me to Hirachand Nemchand College Of Commerce, Solapur
( Autonomous College) , in Advanced Accountancy a under the guidance of Dr. “V.S.
Hasabnis” is my original work and conclusion drawn their under are based on the material
collected by myself .
I further declare that to the best of my knowledge and belief. This report has been submitted
earlier to this or any other university or institution for the award of any degree.
Research Candidate Name
Miss .Avantika Chandrash Anvekar
Place : Solapur
Date :

ACKNOWLEDGEMENT
I sincerely express my gratitude to Hirachand Nemchand College Of Commerce, Solapur

(Automous College) for granting me permission to undergo my “On The Job Training” . I
sincerely thank you to project guide Dr .V.S. Hasabnis sir for the valuable guidance given
to me during my On The Job Training. I express my deep gratitude to all those who helped
for to complete this On The Job Training. I am thankful to respected principal sir and all the
faculty members for their guidance during the completion of this project.
Research Candidate Name
Miss . Avantika Chandrash Anvekar
Place : Solapur
Date :

INDEX
Chapter. Particulars Page no

No
Ⅰ Introduction to research design 1 to 18

and methodology
ⅠⅠ Company profile 19 to 26
Ⅲ Theoretical framework 27 to 39
Ⅳ Data analysis and 40 to 55

Interapretation
Ⅴ Findings , Suggestion , 56 to 58
Conclusion
1.Bibliography 59
2.Annexure 60


CHAPTER-1
TITLE OF THE STUDY
A STUDY ON REVENUE INCOME AND EXPENDITURE ANALYSIS AT

BHARAT MEDICAL STORE
1. INTRODUCTION
1.1 INCOME
Income means the amount of money received in exchange for products or services. Although
typically involving a sum of money, income can also be expressed in terms of property and
other valuable transfers received as a payment for products; as compensation for services
provided; as returns on investments; as gifts; as pension distributions; as dividends; and as
more, over a set period of time.
The word Income has a very broad meaning. It generally means a monetary return whether
received in cash or kind. The income tax department does not make any distinction between
temporary and permanent income. Every the temporary income or one time income is
taxable.
For instance, if you are salaried person, then all that is received from an employer whether in
cash, kind or as a facility is considered as income. For a businessman, his business profits
will constitute income. Income may also flow from investments in the form of Interest,
Dividend, and Commission etc. The Income Tax Act has classified all incomes earned by
persons into 5 different heads. These are:
 1- Income from Salary : Income can be charged under this head only if there is an
employer-employee relationship. Salary includes wages, basic, dearness allowance,
annuity, gratuity, advance of salary, allowances, commission, perquisites in lieu of or in
addition to salary and retirement benefits. The aggregate of the above incomes, after
Hirachand nemchand college of commerce, solapur (autonomous college) 1

exemptions available, is known as Gross Salary and this is charged under the head
income from salary.
 2- Income from House property : Any residential or commercial property that you own
will be taxed as per the Income Tax Law. If you have home loan then interest part of it
would also be considered as negative income from House property i.e. tax benefit is
there on home loan.
 3- Income from Business or Profession : Income earned through your profession or
business is charged under the head ‘profits and gains of business or profession.’
Normally, The income chargeable to tax is the difference between the income received
and expenses incurred.
 4- Income from capital gains : Any profit or gain arising from transfer of capital asset
held as investments (such as house,Jewellery) are chargeable to tax under the head
capital gains. The gain can be on account of short- and long-term gains. Our article
Basics of Capital Gain talks about in detail.
 5- Income from other sources : Any income that does not fall under any of the above
four heads of income is taxed under the head income from other sources. For eg.
Dividend income, interest received from bank deposits etc.
What is the main and most important purpose of income statements?
An income statement is a financial statement that reports a entity's financial performance over
a specific accounting period. Financial performance is assessed by giving a summary of how
the business incurs its revenues and expenses through both operating and non-operating
activities.(Technical definition)
Let's understand the main objective of income statement.
Suppose you own a business. At the year end you want to know the profitability of the entity
and amount of profit you have earned from your business. This statement gives you all
information about it.
Basic objective of income statement is to know profitability of the entity. (Main & Most)
This statement provide various details at one place which are very important to the entity:

 Turnover
 Cost of goods sold
 Operational expenditures
 Financial expenditures
 Selling and distribution expenditures
 Profit (net income) of the entity
Income statement also provide the data for further planning and current controlling process.
You will easily able to compare your budget and actual results that is called as variance
analysis
Some objective of Income statement are as under:
1. Knowing Profitability of Business

2. Knowing the Solvency of the Business
3. Judging the Growth of the Business
4. Judging Financial Strength of Business
5. Making Comparison and Selection of Appropriate Policy
6. Forecasting and Preparing Budgets
7. Communicating with Different Parties
1.2 TYPES OF INCOME (RECEIPT)
Revenue income
Capital receipt( income)
 Revenue receipts-
refer to the receipts of income which a company or government makes from its day-to- day
activities. It does not involve the creation of liabilities or the sale of assets. It is function of
the products and services which are offered in the market.These revenues are recurring in
nature as they are the products of the daily business of a compny or government. It is part of
the profit-and-loss or income statement of the company.
Examples of Revenue receipts are:

1. Tax Revenues
Taxes are compulsory payments imposed by government on people. There are two
kinds of taxes – direct tax and indirect tax.
a. Direct Tax is when the burden of tax and liability of tax falls on the same
person. Examples of direct taxes are Income Tax, Corporation Tax, Wealth
Tax and Gift Tax. You pay these personally.
b. In case the tax burden can be passed on to another person that kind of tax is
called Indirect Tax – for instance – excise duty, custom duty, service tax, sales
tax. These kinds of taxes are passed on by a person/organisation to another
person/organisation i.e. you pay these taxes but recover them from the actual
consumer.
2. Non-Tax Revenue
These refer to those kinds of revenues other than taxes. Examples include: Profits
and Dividends of Public Enterprises, Interest over loans granted, External Aid
Received, Fees and Fines, etc.
 Capital receipt (income)
Capital receipts are the result of decision with long-term implications. They are receipts
received occasionally not from tha day-to-day business activities of the company. Most
commonly, they involve selling one’s assets or creating liabilities.
Capital receipts are generally non-recurring , and a business or a government can’t record it
as their regular source of income. In other words, they are cash inflows from capital gains
generated from the sale of investments or assets like buildings, land, or jewellery. As capital
receipts are the result of transactions of the assets and liabilities, they are part of the balance
sheet. They are not reflected in the income or profit-and-loss statement.
Let us now explore various sources of Capital Receipts:
1. Recovery of Loans
This reduces assets of government and hence must be classified as Capital

Receipt. It should be remembered that a loan given is an asset in the book of

accounts. And recovery of loans reduces this asset class.
2. Borrowings
Funds raised by government from borrowing are treated as capital receipts as these
create liability for government. Amount borrowed is a liability since one has to
repay the borrowing.
3. Disinvestment Receipts
Funds raised by disinvestment are also capital receipts as these reduce assets of
government. Disinvestment of public sector enterprise clearly reduces government
ownership of these enterprises and thus reduces assets of government.
1.3 EXPENDITURE
An expenditure is money spent on something. Expenditure is often used when people are
talking about budgets. It is the government's job to decide what to do with tax money
collected, or in other words, to determine the expenditure of public funds. The word is more
than a long way of saying expense. Expenditure refers to the act of spending money, time, or
resources. In the context of personal finance or business, expenditure typically refers to the
amount of money spent on goods, services, or other expenses. It can also encompass the use
of resources such as time and effort. Understanding and managing expenditure is an
important aspect of financial planning and budgeting for individuals and organizations.
Expenditure basically means spending or exchanging your money for purchase or renting of
goods and services.
Expenditure can be classify in two parts
1. Cash expenses
2. Non cash expenses

 Cash expenses are those where money is paid in return for goods and services.
 Whereas Non cash expenses are those where there is no outflow of money but you
still treat them as expenditure Depreciation,amortisation ,writing off of any asset
etc. are some of the examples of non cash expenses.
According to Finance Strategists, an expenditure is defined as the purchase of goods or

services that are expected to have an economic benefit during a specified period. These
expenditures may include buying office supplies, renting equipment, hiring employees,
paying for consulting services, and leasing space.
The three types of expenditures are capital expenditure, revenue expenditure, and deferred
revenue expenditure.
1.4 TYPES OF EXPENDITURE
In accounting terminology, there are three types of expenditure that a business can incur:
1. Capital Expenditure
2. Revenue Expenditure and
3. Deferred Revenue Expenditure
 Capital Expenditure
A business is set to have incurred capital expenditure when the payment is made to acquire an
asset, the benefit of which would be spread over several years. Businesses in
capital expenditure (CapEx) to acquire new assets or to improve the performance of existing
assets and is usually a one-time expenditure. The hope is that investing in new assets or new
technologies would increase revenue and bring substantial benefits to the business in the long
run.
Capital expenditure
1 Assets will increase or Liability will reduce

2 Non recurring in nature
3 Acquisition of an asset not for the purpose of resale.
4 E.g.: (1) Purchase of a furniture by Mr.Amey for his office
(2) Mr. Amey purchased new machine for 5000 and spent 500 for it's erection. Here both of
them are Capital Expenditure.
 Revenue Expenditure
Revenue expenditure refers to payments made or incurred during the normal course of the
business, the benefits of which are usually received within the same accounting year.
Revenue expenditures are mostly recurring expenses that are incurred by the business to
generate revenues for the accounting period. A company can incur revenue expenditure in
one of the following two ways:
1)Cost of sales or Direct expenses – All expenses incurred by the business directly related to
the manufacture and sale of its goods or services. E.g., Raw material costs, direct labor costs,
etc.,
2)Operating expense or Indirect expenses – All expenses incurred by the business to ensure
the smooth running of its operations. E.g., Advertising expenses, office rent, utility bills, etc.,
Revenue Expenditure
1 Neither Asset will increase nor reduction in liability
2 Recurring in nature
3 The expenditure done to maintain the earning capacity of the business
4 E.g.: (1) Payment of salary to workers.
 Deferred Revenue Expenditure

Deferred revenue expenditure is less common compared to the first two but also contributes
to the increase in the value of assets on the balance sheet. Simply put, deferred revenue
expenditure refers to an advance payment for goods or services, the benefit of which is to be
received only in the future, either during the current accounting period or over the subsequent
accounting periods.
It is very similar to a prepaid expense except that, while benefits from prepaid expenses are
incurred in the same accounting period, benefits from deferred revenue expenses might be
spread over several accounting periods. Until the benefit is received, the expense is treated as
an asset on the balance sheet. As and when the benefit is received by the company, the asset
value gets reduced by the amount of benefit received and that amount is charged off in the
income statement of that accounting period.xpenditure
Balanced Budget: Receipts = Expenditures
A budget is said to be in surplus when receipts are in excess of expenditures.
Surplus Budget: Receipts > Expenditures
A budget is said to be in deficit when receipts are short of expenditures.
Deficit Budget: Receipts < Expenditures
There are various kinds of deficits.
Revenue Deficit refers to excess of revenue expenditures over revenue receipts.
Revenue Deficit = Revenue Expenditures – Revenue Receipts
Capital Deficit on other hand refers to excess of capital expenditures over capital receipts
Capital Deficit = Capital Expenditures – Capital Receipts
Fiscal Deficit refers to excess of total expenditures over total receipt, excluding borrowings.
Fiscal Deficit = (Total Expenditures) – (Total Receipt – Borrowings)
1.5 OBJECTIVES OF THE STUDY

 To study various component of income and expenditure

 To know the overall operational efficiency & performance of the bharat medical store
 To calculate the income and expenditure of an oranganisation
 To study the liquidity position of the company with the help of ratios
 To ensure adequate flow of funds for current operations.
1.6 SCOPE AND LIMITATIONS OF THE STUDY
 SCOPE
The scope of study is restricted to bharat medical store solapur. It is dependent on the
information collected from the account of this firm.
 The present study focus on income and expenditure management.

 To undrestand the profitability on the firm.
 To understand the efficiency on the firm.
 To understand the financial position of the organization.
 LIMITATIONS
 The study is limited to only last year performance of the company .

 Limited intertion with the concerned heads due to their busy schedule.
 The finding of the study are based on information retrieved by the selected unit.
 Study is based on information provided by the company.
1.6 RESEARCH METHODOLOGY
The techniques or the specific procedure which help us to identify, choose, process, and
analye information about a subject is called a research methodology. It is necessary not just to
identify the problem for research but to determined the best method to solved that problem as
well.

Research methodology is classified based on different catrgories. They include general

category, nature of the study, purpose and research design and data type.
1.7 TYPES OF RESEARCH :
This project “A Study on income and expenditure aniysis of Bharat medical store is
considered as analytical research.
Analytical research is defined as the research in which , researcher has to use facts or
information alredy available,and anlye these to make a critical evalution of the facts, figure,
data, or material.
1.8 SOURCE OF RESEARCH DATA
There are mainly two through which the data required for the research is collected.
Primary Data :
The primary data is that data which is collected fresh or frist hand, and for first time which is
original in nature.
In this study the primary data has been collected from personal interaction with the owner of
the medical store.
Secondary Data :
The secondary data are those which have already collected and stored. Secondary data easily
get those secondary data from records, annual report of the companyetc. It will save the time,
money, and efforts to collect the data.
The measure source of data for this project was collected through annual report, profit and
loss account of one year period from & some more information collected from internal and
text source.
 Sampling design :
 Financial Statement
 Last four- year financial statement
 Tool used for calculations : MS Excel.
 Tools used for analysis of data :
 The data were analysed using the following financial tools. They are
 Income and expenditure account
1.9 SIGNIFICNCE OF THE STUDY
In our daily life, we do calculate and keep track of the record of our monthly income against
all the expenses. Similarly, business individuals follow this task of calculating and keeping
track of their income and expenditure. This income and expenditure account is prepared for
tracking the income and expenses of the business to know the surplus earned and deficit
incurred in a period. Without this account, it would be havoc knowing where the money
flowed at the end of the business cycle.In this context, we are going to take up the discussion
of what exactly an income and expenditure account is, what item comes in this account, and
other such important aspects that will be dealt with here.
An Income and Expenditure Account is the detailed summary of every income and expense
incurred by an organization in a specific financial year. Prepared on an accrual basis, this
account records every income and expense in a particular year, irrespective of whether they
are clear or not. Outlined by non-trading entities, this account distinguishes capital from
revenue and takes only the latter into account.Typically, these are nominal accounts, which
outline an organization’s final accounts and are similar to that of profit and loss accounting
by a business entity. These accounts primarily serve to find the surplus or deficit balance of
an organization, taking both current income and expenses into account.
Income is money flowing to you - incoming cash or payments.
Expenditures are money flowing away from you - payments which you make; expenses.
In terms of simple payments changing hands between parties, income for one person is an
expenditure for another and vice versa.
Slightly more complicated part of the answer:

Income and expenditures aren’t limited to simple payments between parties.
Let’s say that you purchase some item, then clean it up and sell it for more than you spent on
it - the difference between what you spent and what you were paid is income to you. And
while the person who bought it from you had an expense (expenditure) in paying you the
purchase price, they received something of value from you. Then if they knew someone else
who’d simply “have to have” this item, and resold it for a higher price, then that markup
would be income. And while this latest buyer had an expenditure, they received something
that they “had to have”.
According to Finance Strategists, income is revenue that an individual or business earns in

exchange for providing a good or service, or through investing capital.
While an expenditure is the purchase of goods or services that are expected to have an
economic benefit during a specified period. These expenditures may include buying office
supplies, renting equipment, hiring employees, paying for consulting services, and leasing
space.
For a household it means you spent all your income and accumulated no savings.
For a government it means you have a balanced budget.
For a business it means you invested as much money paying your costs, as you collected in
sales revenues, so you earned no profits.
It is thus because everyone’s income is someone else’s expense. Every penny an employer
pays to its workers is a cost to them and an income to the workers. In turn, those workers may
hire a lawn service or plumber, converting a portion of their income an expense that becomes
someone else’s income. You can remove the hassle of budgeting when you invest first and
rest you can use for spending.
Have 4 accounts, one is salaried account zero balance, 1 liquid fund for an emergency fund,
one investment account from where your investments are taken, one is spending account, 1 is
another liquid fund for health emergencies.
Identify the emergency, investment, and health accounts amount beforehand as and when you
get a salary and move the amount. Rest move it to spending account. You do not have to
budget now just spend from spending account.

What is the purpose of an annual income and expenditure statement?

An annual income and expenditure statement, also known as a statement of financial
performance or a profit and loss statement, is a financial document that summarizes a
company's or an individual's revenue and expenses over a specific period of time, usually a
year. The purpose of an annual income and expenditure statement is to provide a clear picture
of the financial performance of a company or an individual over a certain period of time and
to show the net profit or loss for that period.
This statement is useful for both internal and external purposes. Internally, it helps a company
or an individual track their performance, identify areas for improvement, and make informed
decisions about their financial strategy. Externally, it provides stakeholders with important
information about a company's financial health, such as creditors, investors, and tax
authorities. It is also used to determine the tax liability of an individual or a company.
In summary, the purpose of an annual income and expenditure statement is to provide a

comprehensive overview of a company's or an individual's financial performance and to
assist in making informed financial decisions.
CHAPTER - 2
INTRODUCTION TO ORGANISATION
BACKGROUND AND INCEPTION OF THE COMPANY

BHARAT MEDICAL STORE is the complete medical shop management software is so

designed as to ease the work load of medical shop professionals. The main feature includes
invoicing , inventory, stock control , accounting ,client, and vendor management.
This software helps you to track all the profits, loss , profitable clients and product of
medical shop accounting software. Flexible and adaptive software suited to medical shop
or stores or pharmacies of any size. Medical Store Management System is used to manage
the stock and sale/ Purchase. In the medical store, the record is very important. This
application is very useful to manage the record of medicines and payments. This is made
in web development. The owner can access this application from anywhere. not even that,
this very organise a way to do professional work. medical is a field in which we need to
deal with so many varieties and different kinds of things and everything we can not store
in mind. So for that problem, it’s a solution and sometimes we need to add additional data
so with this software it will become very easy and organised. Normally in this kind of
situation employees hired but if all processes and management become easy so an owner
reduces the expenses by managing it all on their own. It is very effective and efficient.

2.1 Features
 There is having multiple users option. Multiple users can manage this application
according to their permissions or roles.
• Customer’s record can be saved and get record at any time. Also, customer detail
used for billing.
• There is having a reach option to manage the medicines. Using this option can
easily identify medicine.
• Supplier option is available to add the supplier’s detail where you buy the
medicines.
• Easily can add the product detail using the category which helps to the billing
section.
• You can configure the organization detail in the simplest method ie. organization
name, phone, address, etc.
2.2 OWNERSHIP PATTERN
The Business is managed by the head of the family and he is called karta. However ,all
the members hold equal ownership over the property of an ancestor and they are called
as co-parceners.
This project is proposed by Ms Avantika .C. Anvekar in his proprietary capacity with
the trade name as Mr. Sanjay .R. Achugatala.
2.3 LAND AND BUILDING
This project is proposed at H Group Flopt 1944, Old Vidi Gharkul, Hydrabad Road,
Market Yard Solapur- 413005 (Old Laxmi Bank) where the proprietor has taken a shop
space on lease rent. The said area does not have similar shops and thus resulting into
lesser competition as the business of pharmacy shops tends to a little bit area based.
2.4 PRODUCT
Following are some examples of the items to be stocked
 Medicines
 Pharmaceutical materials
 Ayurvedic medicines and allied products
 Doctor recommended food supplements.
2.5 MACHINERY
There are no machinery required other than a fridge for the project as it is purely
Trading concern. Fridge( refrigerator) is required for some heat sensitive medicines and
injections which are required to be stored at cooler temperature.
2.6 CAPACITY
Being a trading business capacity cannot be defined and quoted. After studing the
existing demand and availability of the business, the proprietor estimates the business.
The financial projection are based on the same.
2.7 SILENT FEATURES
 Menu driven, Key Board and Mouse Navigation.

 Paperless practice.
 Improve Efficiency, Productivity.
 Cost Effective Solution.
 Graphic Under Interfce with Context Sensitive Heip.
 No Special Training Needed For Using the System.
2.8 GENERAL FEATURES

 Automatic importing of drug list
Inbuit account group and account ledgers.
 Option for setting default company.

 Keep address book / telephone directory for easy access.
 Maintain customer relationship.
 Incorporates calculator with system.
 Option for sending mail from bharat medical store itself.
2.9 MODULES
 Database Operation.
 Initial Records.
 Transaction Management.
 Inventory Management.
 Accounting.
 User Management.
2.10 DATABASE OPERATIONS
All operation relating to database is carried out in this module.
Including :-
 Create Company
 Edit/Delete company
 Back up
 Restore

2.11 INITIAL RECORDS
The module in which initial details needed are stored
Including :-
 Account group
 Account ledger
 Shelf
 Generic name
 Product group
 Product batch
 Unit
 Product
 Manufacture
 Vendor
 Sales man
 Daily customer
 Greeting text
2.12 TRANSACTION MANAGEMANT
The module in which transaction of cash and material is carried out
Including :-
 Purchase
 Purchase Return
 Sales
 Sales Return
 Counter Sale

 Payment
 Receipt
 Journal Entry
2.13 INVENTORY MANAGEMENT
The module in which stock details are maintained
Including :-
 Stock entry
 Demage Stock.
2.14 ACCOUNTING
This module handles all accounting in medical shop.
Including :-
 Account group
 Account ledger
 Payment
 Receipt
 Journal Entry.
2.15 USER MANAGEMENT
The module in which various users of BHARAT MEDICAL STORE are created.
Different privilege levels can be signed to each user for providing high security.
So it Includes :-

 User creation
 Privilege setting
2.16 SYSTEM REQUIREMENTS
 Required processor ;Pentium 90 MHz or faster

 Required RAM ;128 MB (256 or more recommended)
 25MB of available hard-disk space for installation
 CD-ROM drive (only for installation)
 1,024x768 display (1280x800 recommended)
2.17 SOFTWARE SPECIFICATION
 Operating system : net framework 2.0 version compactable software platform

 Technology : Microsoft net 2005
 Front end : C#.NET
 Back end : Microsoft SQL Server 2005.

CHAPTER-3
THEORETICAL & FRAME WORK
3.1 Introduction to Income and Expenditure Account
Not-for-profit or Non-trading organizations work for the welfare of its members. They are
known as not-for-profit organization as their major purpose is not profit generation or profit
maximization. But it does not mean they may not collect profits at the end of the year.
They also receive a lot of donations and subscription fees. They collect various kinds of fees
from its members in order to sustain their existence. If it is true that they can earn profits, then it
is also true that they need to prepare certain accounts which shows their profit records. Income
and Expenditure account is a nominal account, prepared by a not for profit organisation, to
ascertain whether there is surplus or deficiency during a financial year. Income and
Expenditure account is prepared on accrual basis of accounting and is very similar to a profit

and loss account of a trading concern. It includes items of revenue nature, and excludes all
capital items. If the credit side of Income and Expenditure account is greater than th debit
side the difference is treated as surplus (Excess of Income over Expenditure), and if debit side
is greater the difference is treated as deficiency (Excess of Expenditure over Income). Surplus
or Deficiency is transferred to capital firm in the balance sheet. Income account is the
company which earns the money from the sale of goods and assets, received bank interest
etc., and expenditure account is the company which spends the money on the purchase of
goods and assets, paying salary, rent, taxes etc.,
3.2 Meaning of income and expenditure account
The income and expenditure account is prepared by the non-trading entities to determine
surplus or deficit of income over expenditures for a particular time frame. The accumulated
or accrual concept of accounting is rigidly pursued while preparing income and expenditure
a/c of non-trading concerns. It is prepared as a portion of final accounts of non-trading
entities and is equal to the profit and loss account outlined by for-profit business entities. An
income and expenses account is considered as a detailed summary of each and every income
earned and expenditure incurred by an organization for a particular financial year. It is
prepared on an accrual basis, that means, the concept of accumulated or accrual is followed.
It is a nominal account of non-trading institutions equivalent to the Profit and Loss Account
of the business concerns. It shows the classified summary of incomes, expenses, and losses
for the current accounting period along with the excess of income over expenditure (i.e.
surplus) or excess of expenditure over income (i.e. deficit) which is transferred to the Capital
Fund in the Balance Sheet. It is generally prepared from a given Receipts and Payments
Account after making necessary adjustments. An Income and Expenditure Account being
itself a nominal account includes only nominal accounts or revenue items. All items of
revenue nature (nominal accounts) pertaining to relevant accounting period and, which
appear, on the debit side of the Receipts and Payments Account are entered on the credit side
(i.e. income side) of the Income and Expenditure Account with necessary adjustments for
prepaid or outstanding figures. Similarly, all the revenue items (nominal accounts) appearing
on the credit side of the Receipts and Payments Account will be entered on the debit side (i.e.
expenditure side) of the Income and Expenditure Account with necessary adjustments as to
prepaid or outstanding items. Thus, items of capital nature, such as the purchase of

machinery, building, furniture, etc. shall appear in the Balance Sheet. The end balance of the
Income and Expenditure Account, which may be either excess of income over expenditure or
excess of expenditure over income would be added to or deducted from, as the case may be,
the Capital Fund on the liabilities side of the Balance Sheet.
The income and expenditure is a nominal account and outlined by the non-trading concerns.
It distinguishes the capital from revenue and takes only the revenue into consideration.
These accounts majorly serve the purpose to figure out the surplus or deficit balance of a non-
trading concern by working with both the current incomes and expenses.
3.3 Characteristics of Income and Expenditure Account
 Non-trading concerns prepare this account.
 It’s nature similar to the Profit and Loss Account as made by the for-profit concerns.
 Though it is prepared at the end of the year, it does not mean that it shows a record of a
whole year.
 It determines the surplus or deficit of income over expenditures
 The concern prepares this account by strictly following the Double Entry System.
 The surplus or deficit of this account is transferred to the capital fund account.
 Unlike the Receipts and Payments Account, it does not start with an opening balance
and ends with a closing balance.
 It strictly follows the accrual basis of accounting.
 An independent auditor has to audit this account for the validation of the account.
3.4 Features of Income and Expenditure Account
Below mentioned are the characteristic features of Income and Expenditure Account :
 Income and expenditure account presented by non-trading entities are much like the
profit and loss a/c presented by trading entities.

 It is prepared by stringently following the fundamentals of the double-entry system of

bookkeeping or accounting.
 It is always prepared during the end of the period which normally comprises of 1 year.
 It decides the surplus or deficit of income over expends of the non-trading entities for
the particular year.
 The surplus or deficit from the income and expenditure account is moved to the
capital fund a/c.
 The Income and expenditure account of only revenue nature are incorporated in this
account. Any income and expenditure of capital nature are not comprehended.
 It is prepared by accountants chosen by the enterprise’s management and is audited by

an independent auditor.
 It does not begin with the opening balance, and it follows back the incomes received
and expenditures incurred by the non-trading entities during the financial year.
 The accumulated or accrual concept of accounting is rigidly pursued when it is

prepared.
3.5 Importances of income and expenditure account

An income statement helps business owners decide whether they can generate profit by
increasing revenues, by decreasing costs, or both. It also shows the effectiveness of the
strategies that the business set at the beginning of a financial period. The business
owners can refer to this document to see if the strategies have paid off. Based on their
analysis, they can come up with the best solutions to yield more profit.
Following are the few other things that an income statement informs.
 Frequent reports: While other financial statements are published annually, the income
statement is generated either quarterly or monthly. Due to this, business owners and
investors can track the performance of the business closely and make informed
decisions. This also enables them to find and fix small business problems before they
become large and expensive.
 Pinpointing expenses: This statement highlights the future expenses or any unexpected
expenditures which are incurred by the company, and any areas which are over or under

budget. Expenses include building rent, salaries and other overhead costs. As a small
business begins to grow, it may find its expenses soaring. These expenditures may
involve hiring workers, buying supplies and promoting the business.
 Overall analysis of the company:

This statement gives investors an overview of the business in which they are planning to
invest. Banks and other financial institutions can also analyze this document to decide
whether the business is loan-worthy.
Where as expenditure is An expenditure represents a payment with either cash or credit to
purchase goods or services. It is recorded at a single point in time (the time of purchase),
compared to an expense that is recorded in a period where it has been used up or expired.
This guide will review the different types of expenditures used in accounting and finance.
To record the occurrence of an expenditure, an accountant must show evidence of the
transaction occurring. For instance, a sales receipt will show proof of an over-the-counter
sale, while an invoice will indicate a request for payment for goods and services. The
documents exist to enable organizations to maintain tight control over their transactions.
Usually, the goal is to anticipate profits and losses while still keeping track of revenues.
A "Profit and Loss Account" and an "Income and Expenditure Account" are financial
statements used in different contexts, primarily by different types of organizations. Here
are the key differences between the two:
1. Purpose and Usage: Profit and Loss Account: This statement is primarily used by
businesses and commercial enterprises. It is designed to show the financial
performance of a company over a specific period, such as a fiscal year. It calculates
and reports the net profit or loss of the business by subtracting expenses from
revenue. Income and Expenditure Account: This statement is used by non-profit
organizations and is similar to a Profit and Loss Account but adapted for the
specific needs of these organizations. It records all sources of income (revenue) and
expenses for a particular period, typically a fiscal year, to determine whether the
organization has surplus (excess of income over expenditure) or a deficit (excess of
expenditure over income).

2. Reporting Method: Profit and Loss Account: It follows the accrual accounting
method, where revenues and expenses are recognized when they are earned or
incurred, regardless of when cash changes hands. It includes items like
depreciation, amortization, and provisions. Income and Expenditure Account: It
often follows the cash basis of accounting, which means it records income and
expenses when cash is received or paid. Non-profit organizations often rely on
donations and grants, which are typically accounted for on a cash basis.
3. Terminology: Profit and Loss Account: This statement uses terms such as
"revenue," "cost of goods sold," "gross profit," "operating income," "net profit,"
and "earnings." Income and Expenditure Account: This statement uses terms like
"income," "expenditure," "surplus," and "deficit" instead of "profit" and "loss."
4. Legal Requirements: Profit and Loss Account: It is a legal requirement for

businesses in many countries to prepare and publish a Profit and Loss Account as
part of their financial statements for taxation and reporting purposes. Income and
Expenditure Account: Non-profit organizations, especially those with tax-exempt
status, may be required to prepare and report an Income and Expenditure Account
to comply with regulations specific to their sector.
In summary, the key difference between a Profit and Loss Account and an Income and
Expenditure Account lies in their purpose, usage, and the types of organizations for which
they are prepared. The Profit and Loss Account is used by for-profit businesses to measure
their profitability, while the Income and Expenditure Account is used by non-profit
organizations to assess their financial position and determine whether they have a surplus or
deficit.
Income and expenditure account is a nominal account which is prepared for finding the
excess of income over expenditures or excess of expenditures over incomes.
It is prepared by not -for profit organization whose aim is not to earn money.
It is prepared based on receipt and payment account and some other information. It’s source
of income majorly depends upon subscription, donations, and grants.

Whereas Profit and loss account is the account which is prepared for finding net profit or net
loss. It is prepared by the business whose aim is to earn money and gain profit from their
business. The net profit or loss is distributed among the owners of the company.
This account is prepared on the basis of trial balance and some other information. It’s source
of income is by revenue received from goods sold or services rendered.
And when it comes to Balance of account, in case of expenditure account when we compare
debit and credit side of this account, balance will be surplus or deficit, but in case of profit
and loss account the balance of profit and loss account will be net profit or net loss.
3.6 Advantages of Income and Expenditure Account

1. Revenue Information
One of the major advantage of this account that it helps the concern to know about its revenues.
It gives the concern about their past records and the current trends. Moreover, it will provide the
concern relevant information for their futuristic course of action.
It tells them their major source of profits and their loopholes where they are spending a lot. It
helps them to control the extravagant expenditure approach.

2. Beneficial for the Investors
Investors are very much interested in the profits and losses of the concern. In the case of non-
trading concerns, it is especially the government which is interested in the statements of the
concern.
It is because they provide the concern with many facilities in the form of subsidies and
donations. They want to analyze the working and the position of the concern. It helps them to
decide the number of futuristic grants and donations.
3.7 Disadvantages of Income and Expenditure Account
Nobody can deny the fact that whenever there are advantages, there are certain disadvantages
too. In the case of the Income and Expenditure Account, there is only one major disadvantage.
This disadvantage is ‘Misinterpretation of Data’. As we have seen above also that the concern is
highly dependent on the government for various funds and facilities.
The government is only interested to help only those concerns which are performing well. The
wellness of the concern is visible by its statements.
In order to show their competence, it is mostly seen that they end up doing window-dressing of
their statements. This becomes a very major disadvantage of this account
 Format of Income and Expenditure Account
Expenditure Amount Income Amount
Consumable Materials XXX Subscriptions XXX

Grants
Honorarium XXX XXX
Received
Salary and Wages XXX Entrance Fees XXX
General
Repairs XXX XXX
Donations
Interest on
Entertainment Expenses XXX XXX
Deposits
Printing and Stationary XXX Dividends XXX
Newspapers and Profit on Sale

XXX XXX
Periodicals of Asset
Postage XXX Locker’s Rent XXX
Cloak Room
Upkeeps of Lawns XXX XXX
Rent
Rent XXX Hall Rent XXX

Collection for
Municipal Taxes XXX XXX
Specific Show
Sale of
Insurance XXX newspaper and XXX
magazines
Loss on Sale of Fixed Miscellaneous

XXX XXX
Asset Incomes
Depreciation XXX
Audit Fees XXX
Surplus XXX Deficit XXX
XXX XXX
3.8 Steps to Prepare Income and Expenditure Account
1. Include all items of receipts and expenditure, on the respective side of the account

2. Avoid entering capital incomes and expenses
3. Make adjustments of Prepaid and Outstanding expenses and incomes
4. Further, items included in receipts and payment account, depreciation, provisions, and
profit or loss on sale of assets will have to be included in this account
5. Finally, after putting down all items of revenue and expenses, you’ll get a balance. The
resulting balance will reveal the surplus or deficit
Here below are the basic difference between receipts & Payments accounts:
1. Receipts and Payments Account is a summarised statement of cash receipts and cash
payments during a particular period, whereas the Income and Expenditure Account is the
substitute of a Profit and Loss Account for non-trading concerns.
2. While Receipts and Payments Account, just like cash book, commences with opening cash
balance/bank balance and closes with closing cash balance/bank balance, Income and
Expenditure Account has nothing to do with opening or closing cash/bank balances.
3. Receipts and Payments Account concerns itself with actual cash received or paid during
the period and ignores outstanding expenses as well as income accrued whereas Income and
Expenditure Account includes all income even if not received and all expenses even if not
paid.
4. Though the Receipts and Payments Account includes both capital and revenue items, the
Income and Expenditure Account includes revenue items only.
5. While Receipts and Payments Account shows receipts on the debit side and payments on
the credit side, Income and Expenditure Account shows income on the credit side and
expenses on the debit side.
6. Receipts and Payments Account includes items relating to preceding as well as succeeding
years. Income and Expenditure Account, on the other hand, concerns itself, only with income
and expenditure of the period to which it relates.

7. In the Receipts and Payments Account difference between the two sides will represent the
closing cash/bank balance. In the Income and Expenditure Account, the difference will mean
either excess of income over expenditure or vice-versa.
8. Receipts and Payments Account is generally accompanied by a statement of affairs,

whereas Income and Expenditure Account is always accompanied by Balance Sheet.
9. Receipts and Payments Account belongs to the category of “real accounts”, but Income
and Expenditure Account belong to the family of “nominal accounts”.
4 The practical steps involved in the preparation of a Receipts and Payments Account from
an Income and Expenditure Account are:
Step I Put the ‘opening balances’ of cash/bank as the first item on the ‘Receipts side’ and
‘closing balances’ of cash/bank as the last item on the ‘Payments side’ of the Receipts and
Payments Account. If one of the two balances is given, the other balance will have to be
ascertained.
Step II Ascertain ‘Revenue Receipts’ received during the current accounting period as under
and show it on the receipts side of Receipts and Payments Account: Revenue Income
(account-wise) for the current year as per Income and Expenditure Account.
Add (+) Income received in advance at the end of the current year.
Add (+) Income outstanding at the beginning of the current year.
Less (-) Income outstanding at the end of the current year.
Less (-) Income received in advance at the beginning of the current year.
Step III Ascertain ‘Revenue Payments’ made during the current accounting period as under
and show it on the payments side of Receipts and Payments Account: Revenue expenses
(account-wise) for the current year as per Income and Expenditure Account
Add (+) Expenses outstanding at the beginning of the current year.
Add Expenses prepaid at the end of the current year.

Less (-) Expenses outstanding at the end of the current year.
Less (-) Expenses prepaid at the beginning of the current year.
Step IV Ascertain all capital receipts and capital payments from the additional information or
Balance Sheets or by preparing the accounts of capital items and showing the capital receipts
on the ‘Receipts side’ and the capital payments on the ‘Payments side’ of the Receipts and
Payments Account.

CHAPTER – 4
4.1 DATA ANALYSIS & INTERPRETATION
Data analysis is the process of examining, filtering, adapting, and modeling data to help solve
problems. Data analysis helps determine what is and isn't working, so you can make the
changes needed to achieve your business goals.
Keep in mind that data analysis includes analyzing both quantitative data (e.g., profits and
sales) and qualitative data (e.g., surveys and case studies)
For the data analysis research has made use of secondary data . the data is collected from the
Book Of Account , Profit And Loss and Balance sheet for the three financial year 2018-
2019 , 2019-2020, 2020-2021 . for the easy interpretation the researcher has shown the data
in tabular form.

CHAPTER- 5
5.1 FINDING, SUGGESTION AND CONCLUSION
 Current ratio of harat medical store is maximum during the year 20021-2022 i.e. 7.81
according to norms of current ratio 2:1 it was good for the company and showed that the
store maintained the current assets and current liabilities in a proper manner.
 Bharat medical store quick ratio was standard during the study period and the standard
norms of quick ratio 1:1 which indicates proper ultilization of quick assets and liabilities.
 The inventory turnover ratio is not satisfactory because the ratio is fluctuating by the year
from the year 2019-2020 to 2021-2022 the highest ratio is 9.60 and the lowest ratio is
5.14.
 Income and expenditure turnover ratio indicates that the highest and lowest income and
expenditure in the store is fluctuating for 4 year but in last year it has been increased
 The gross profit ratio is not satisfactory because this ratio is continuously decreasing year
by year from 2019-2020 to 2021-2022 the highest rtio is 12.86 and lowest is 7.73.
 In the firm there is current assets fluctuating for four years but in last year it has been
decreased in current assets. The firm is not satisfactory within its last year current assets.
 The change in income & expenditure of 2018-2019 and 2019-2020 is 43,83,505.00 and
1,65,29,186.00 respectively. But it shows increased in income and expenditure of
1,21,45,681.00 in the year 2020-2021 compare to 2019-2020.
 The change in income & expenditure of 2019-2020 and 2021-2022 is 1,65,29,186.00 and
1,63,47,552 respectively. But it shows decreased in income and expenditure of
1,81,634.00 in the year 2021-2022 compare to 2020-2021.
 The change in income & expenditure of 2019-2020 and 2021-2022 is 1,63,47,552.00 and
1,38,85,397.00 respectively. But it shows decreased in income and expenditure of
24,62,155.00 in the year 2021-2022 compare to 2018-2019.

5.2 SUGGESTIONS
 The current and quick ratios are almost up to the standard requirement to the income and
expenditure account. Bharat medical store is satisfactory and it has to maintain it further.
 The gross profit ratio is not satisfactory because there is decreased in ratio so company
need to concentrate in its profit.
 Management should mke a proper use of inventory control techniques like fixation of
minimum , maximum, and ordering levels for all the tablets for less blockage of money.

5.3 CONCLUSION
This system provides an easy way for the operator to interact with the database and to
manipulate the data in the database.
The operator can add, delete and update the recorda in the database with ease.
It is complete medical shop management software is so designed as to ease the work load of
medical shop professionals. The main feature includes invoicing, inventory, and stock
control, accounting, client and vendor management.

BIBLOGRAPHY
1. Books Referred
a. Advanced Accountncy- Suneel .K. Maheshwri , Sharad .K. Maheshwari
b. Advanced Accountancy (2015)- Gupta R. L., Radhaswamy M
2. Websites Referred
 https://www.scribd.com/document/515897389/Medical-Store
 https://www.vedantu.com/commerce/income-and-expenditure-account
 https://www.shiksha.com/m-com-subjects-chp
 www.projectguidance.com

ANNEXURE
Appendix 1 Recommended storage conditions Note: Appropriate conditions should be

provided for medical products during storage and distribution. Conditions should be
maintained as stated on their labels (or as described by the manufacturers as applicable)
during storage and distribution. Statements such as “store at ambient conditions” should be
avoided. Where possible, actual limits should be specified by the manufacturers, such as
“store below 25 °C”. See Table A7.1 below.
Table A7.1 Recommended limits for descriptive storage conditionsa
Label description Recommended limits
Store at controlled room temperature 15 to 25 °C
Store in a cold or cool place 8 to 15 °C
Store in a refrigerator 5 ± 3 °C
Store in a freezer –20 ± 5 °C
Store in deep freezer –70 ± 10 °C
Store in a dry place No more than 60% relative humidity
Protect from moisture No more than 60% relative humidity
Store under ambient conditions Store in well-ventilated premises at
temperatures of between 15 °C and 30 °C
and no more than 60% relative humidity.
Extraneous odours, other indications of
contamination and intense light must be

excluded. Protect from light To be maintained in the
original manufacturer’s

light-resistant containers.
Chilled 5 ± 3 °C

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Advanced Accountancy M.

Com – Ⅰ “On The Job Training Report”

HIRACHAND NEMCHAND COLLEGE OF COMMERCE, SOLAPUR

MISS. AVANTIKA CHANDRASH ANVEKAR

Dr. V.S. HASABNIS

(M.com, MBA, DLL, M.PHiL, PhD)

Hirachand nemchand college of commerce ,solapur (autonomous college)

Project Guide Name

Dr. V.S. Hasabnis

Hirachand nemchand college of commerce ,solapur (autonomous college)

Research Candidate Name

Miss .Avantika Chandrash Anvekar

Hirachand nemchand college of commerce ,solapur (autonomous college)

I sincerely express my gratitude to Hirachand Nemchand College Of Commerce, Solapur

Research Candidate Name

Miss . Avantika Chandrash Anvekar

Hirachand nemchand college of commerce ,solapur (autonomous college)

Chapter. Particulars Page no

Ⅰ Introduction to research design 1 to 18

Ⅳ Data analysis and 40 to 55

Hirachand nemchand college of commerce ,solapur (autonomous college)

Hirachand nemchand college of commerce ,solapur (autonomous college)

TITLE OF THE STUDY

A STUDY ON REVENUE INCOME AND EXPENDITURE ANALYSIS AT

Hirachand nemchand college of commerce, solapur (autonomous college) 1

What is the main and most important purpose of income statements?

Let's understand the main objective of income statement.

Hirachand nemchand college of commerce, solapur (autonomous college) 2

Some objective of Income statement are as under:

1. Knowing Profitability of Business

1.2 TYPES OF INCOME (RECEIPT)

Capital receipt( income)

Examples of Revenue receipts are:

Hirachand nemchand college of commerce, solapur (autonomous college) 3

 Capital receipt (income)

Let us now explore various sources of Capital Receipts:

Hirachand nemchand college of commerce, solapur (autonomous college) 4

Receipt. It should be remembered that a loan given is an asset in the book of

Expenditure can be classify in two parts

Hirachand nemchand college of commerce, solapur (autonomous college) 5

According to Finance Strategists, an expenditure is defined as the purchase of goods or

1.4 TYPES OF EXPENDITURE

1 Assets will increase or Liability will reduce

Hirachand nemchand college of commerce, solapur (autonomous college) 6

2 Non recurring in nature

3 Acquisition of an asset not for the purpose of resale.

4 E.g.: (1) Purchase of a furniture by Mr.Amey for his office

1 Neither Asset will increase nor reduction in liability

3 The expenditure done to maintain the earning capacity of the business

4 E.g.: (1) Payment of salary to workers.

 Deferred Revenue Expenditure

Hirachand nemchand college of commerce, solapur (autonomous college) 7

Balanced Budget: Receipts = Expenditures

A budget is said to be in surplus when receipts are in excess of expenditures.

Surplus Budget: Receipts > Expenditures

A budget is said to be in deficit when receipts are short of expenditures.

Deficit Budget: Receipts < Expenditures

There are various kinds of deficits.

Revenue Deficit refers to excess of revenue expenditures over revenue receipts.

Revenue Deficit = Revenue Expenditures – Revenue Receipts

Capital Deficit = Capital Expenditures – Capital Receipts

Fiscal Deficit = (Total Expenditures) – (Total Receipt – Borrowings)

1.5 OBJECTIVES OF THE STUDY