Question 1

What is bookkeeping?

Accepted Answer

Bookkeeping is the systematic, chronological recording, classifying, and organizing of all day-to-day financial transactions—including sales invoices, vendor bills, payments, receipts, and bank movements—into formal accounting ledgers.

Question 2

What is accounting?

Accepted Answer

Accounting is the broader financial discipline that takes bookkept records, applies accounting standards and principles, performs adjustments (depreciation, accruals, prepayments), and compiles financial statements (P&L, Balance Sheet, Cash Flow) for analysis and decision-making.

Question 3

What is the difference between bookkeeping and accounting?

Accepted Answer

Bookkeeping is transactional and administrative (recording entries, maintaining ledgers, and matching invoices). Accounting is analytical and strategic (interpreting data, auditing reconciliations, preparing tax schedules, and presenting financial statements).

Question 4

Why is bookkeeping important for an Indian business?

Accepted Answer

Proper bookkeeping prevents cash leakages, tracks customer receivables and vendor payables, provides audit-ready trails, avoids tax disallowances, and generates the underlying transactional data necessary for GST, TDS, and corporate tax filings.

Question 5

Why should a business maintain proper books of accounts?

Accepted Answer

Section 128 of the Companies Act, 2013 and direct tax laws mandate that every incorporated business keep proper books of accounts on an accrual basis with an audit trail, reflecting a true and fair view of the state of affairs.

Question 6

What are source documents?

Accepted Answer

Source documents are the primary physical or digital proof of a financial transaction, including sales invoices, vendor purchase bills, bank payment receipts, credit notes, debit notes, payroll registers, and bank statements.

Question 7

What is a Chart of Accounts (CoA)?

Accepted Answer

A Chart of Accounts is an organized index of all financial ledgers used in a company's accounting software, systematically grouped into five core categories: Assets, Liabilities, Equity, Income, and Expenses.

Question 8

What is a journal entry?

Accepted Answer

A journal entry is the formal recording of a financial transaction in the accounting system using the double-entry bookkeeping rule, where total debit amounts must equal total credit amounts.

Question 9

What are the golden rules of Debit and Credit?

Accepted Answer

Assets and Expenses increase with Debit and decrease with Credit. Liabilities, Equity, and Income increase with Credit and decrease with Debit. Debit does not inherently mean 'expense', nor does Credit inherently mean 'income'.

Question 10

What is a ledger in accounting?

Accepted Answer

A ledger is an account-specific book or digital register that aggregates all debit and credit entries impacting a particular party, expense, asset, or liability to determine its opening balance, running transactions, and closing balance.

Question 11

What is a cash book?

Accepted Answer

A cash book is a specialized subsidiary ledger that records all cash receipts and cash disbursements chronologically, reconciling opening cash in hand with closing physical cash.

Question 12

What is a bank book?

Accepted Answer

A bank book is the internal accounting ledger recording all deposits, withdrawals, online transfers, and bank charges reflecting the company's perspective of its bank account balance.

Question 13

What is Bank Reconciliation Statement (BRS)?

Accepted Answer

BRS is a critical accounting schedule explaining and reconciling the difference between the bank balance reported in your internal accounting books and the actual balance shown on the bank statement.

Question 14

Why does the bank book balance differ from the bank statement?

Accepted Answer

Common timing differences include cheques issued but not yet presented by vendors, cheques deposited but clearing, automated bank charges, interest credits, and direct customer NEFT/RTGS payments unbooked internally.

Question 15

How frequently should bank reconciliation be performed?

Accepted Answer

For active operating businesses, bank reconciliation should be performed weekly or monthly to detect unauthorized transactions, unallocated bank entries, or duplicate debits early.

Question 16

What is cash reconciliation?

Accepted Answer

Matching physical cash in hand counted at the close of day or month against the book balance in the petty cash ledger, ensuring zero unexplained shortages or unaccounted cash spending.

Question 17

What are Accounts Receivable (AR)?

Accepted Answer

Accounts Receivable represents the total outstanding money owed to your business by customers for goods sold or services rendered on credit, recorded as a current asset.

Question 18

What is receivable ageing analysis?

Accepted Answer

A management report categorizing customer unpaid invoices by the length of time they have been outstanding (Current, 1–30 days, 31–60 days, 61–90 days, 90+ days overdue) to drive collections.

Question 19

What are Accounts Payable (AP)?

Accepted Answer

Accounts Payable represents the short-term financial liabilities owed by your business to suppliers, vendors, and service providers for goods or services purchased on credit.

Question 20

What is vendor ageing analysis?

Accepted Answer

A report tracking outstanding vendor bills according to payment due dates, helping businesses optimize working capital, avoid supply disruption, and avoid vendor interest charges.

Question 21

What is a credit note in bookkeeping?

Accepted Answer

A document issued by a seller to a buyer reducing the amount payable on an earlier invoice due to sales returns, damaged goods, rate corrections, or negotiated commercial discounts.

Question 22

What is a debit note in bookkeeping?

Accepted Answer

A document issued by a buyer to a supplier intimating a debit against their account for purchase returns or quality rejections, or issued by a seller for supplementary charges.

Question 23

What is fixed asset accounting?

Accepted Answer

The process of capitalizing long-term tangible assets (computers, servers, vehicles, office property, telecom network gear) into the balance sheet rather than treating them as immediate period expenses.

Question 24

What is a Fixed Asset Register (FAR)?

Accepted Answer

A master record tracking individual capital assets, purchase invoice dates, vendor details, physical location, capitalization cost, depreciation rate, accumulated depreciation, and net book value.

Question 25

What is depreciation in accounting?

Accepted Answer

The systematic allocation of the depreciable cost of a tangible capital asset over its estimated useful economic life in accordance with applicable accounting standards.

Question 26

Is book depreciation the same as tax depreciation?

Accepted Answer

No. Book depreciation is calculated under the Companies Act, 2013 (Schedule II useful lives). Tax depreciation is computed separately under Section 32 of the Income-tax Act using statutory block-of-assets rates.

Question 27

What is loan accounting?

Accepted Answer

The structured ledger tracking of bank borrowings, EMIs, principal repayment (reducing balance sheet liability), and interest expense (charged to the Profit & Loss statement).

Question 28

What is petty cash accounting?

Accepted Answer

Managing an imprest fund for small, routine office cash disbursements (stationery, tea, local courier) verified through expense vouchers and periodically reimbursed.

Question 29

What is a suspense account in bookkeeping?

Accepted Answer

A temporary holding ledger in the general ledger used to park unknown bank receipts, unidentified deposits, or unbalanced entries pending investigation and correct classification.

Question 30

Why must suspense accounts be cleared before month-end closing?

Accepted Answer

Leaving balances in suspense distorts revenue, hides unapplied customer receipts, creates tax audit qualifications, and risks misrepresenting financial statements.

Question 31

What is an unreconciled transaction?

Accepted Answer

Any bank entry, customer payment, or vendor debit appearing on bank statements or invoices that has not been mapped or cleared against an internal accounting ledger.

Question 32

How can duplicate entries be detected in accounting books?

Accepted Answer

Through automated ledger audits cross-checking identical invoice numbers, transaction dates, vendor GSTINs, and exact amounts across cash and bank books.

Question 33

What is monthly book closing?

Accepted Answer

The formal month-end accounting process of posting all sales, purchases, payroll, and depreciation, reconciling bank and cash, clearing suspense, and generating the preliminary Trial Balance.

Question 34

What is year-end book closing?

Accepted Answer

The annual financial closing where all 12 months of ledgers are audited, inventory counted, vendor/customer balances confirmed, statutory provisions created, and final financial statements compiled.

Question 35

What is accrual accounting?

Accepted Answer

The standard accounting principle where revenue and expenses are recognized when earned or incurred, regardless of when cash is actually received or paid.

Question 36

What is a prepaid expense?

Accepted Answer

An upfront cash payment made for future economic benefits (such as annual insurance, software subscriptions, or advance rent) recorded as a current asset and amortized monthly.

Question 37

What is a provision in accounting?

Accepted Answer

An estimated liability recognized in the Profit & Loss statement for an obligation of uncertain timing or amount (such as provision for doubtful debts or annual audit fees).

Question 38

What is capital expenditure (CapEx) vs revenue expenditure (OpEx)?

Accepted Answer

CapEx creates or enhances long-term assets providing multi-year economic benefits (capitalized on the Balance Sheet). OpEx maintains day-to-day business operations (expensed immediately in P&L).

Question 39

How should personal expenses of directors be treated in company books?

Accepted Answer

Personal expenses must never be booked as corporate business expenses. They should be debited to the director's personal current account or loan ledger to prevent tax disallowances.

Question 40

What is an audit trail in accounting software?

Accepted Answer

An automated tamper-evident digital log recording every change, edit, or deletion made to an accounting entry, mandatory under Ministry of Corporate Affairs rules for Indian companies.

Question 41

What is maker-checker control in bookkeeping?

Accepted Answer

An internal security control where an accountant posts transaction entries (Maker), and a senior finance manager or controller reviews and approves them (Checker) before ledger finalization.

Question 42

What is a Trial Balance?

Accepted Answer

A mathematical summary statement listing the debit or credit closing balance of every ledger account at a given date, used to verify that total debits equal total credits.

Question 43

Does a balanced Trial Balance guarantee that books are completely error-free?

Accepted Answer

No. A balanced Trial Balance only proves mathematical equality. It does not detect compensating errors, errors of omission, errors of principle, or posting to the wrong party ledger.

Question 44

What is a Profit & Loss (P&L) statement?

Accepted Answer

A financial statement summarizing total operating revenue, other income, cost of goods sold, and operating expenses over a specific period to calculate Net Profit or Net Loss.

Question 45

What is a Balance Sheet?

Accepted Answer

A snapshot financial statement reflecting the financial position of a business at a specific date, showing Assets = Liabilities + Shareholder Equity.

Question 46

What is a Cash Flow statement?

Accepted Answer

A financial report tracking actual inflows and outflows of cash categorized into Operating Activities, Investing Activities, and Financing Activities.

Question 47

Why is net profit different from cash flow?

Accepted Answer

Profit includes credit sales and non-cash expenses (like depreciation). Cash flow tracks actual liquid cash movements. A highly profitable company can still face severe cash shortages if receivables remain uncollected.

Question 48

What is Management Information System (MIS) reporting?

Accepted Answer

Customized periodic financial dashboards provided to leadership summarizing revenue trends, gross margins, expense breakdowns, debtor ageing, and working capital ratios.

Question 49

What is payroll accounting?

Accepted Answer

The monthly ledger posting of gross salary expenses, employer PF/ESI contributions, statutory liabilities (TDS payable, PF payable, PT payable), and net salary bank payouts.

Question 50

How does bookkeeping connect with GST return filing?

Accepted Answer

Bookkeeping produces the verified sales register (for GSTR-1) and purchase register (for GSTR-2B reconciliation). Accurate bookkeeping ensures GSTR-3B tax liabilities and ITC match books.

Question 51

Does bookkeeping include GST return filing?

Accepted Answer

No. Bookkeeping maintains accounting ledgers and organizes tax data. GST return filing is an independent statutory compliance submission to the government.

Question 52

How does bookkeeping connect with TDS return filing?

Accepted Answer

When expenses (rent, professional fees, contractor bills) are booked, bookkeeping calculates applicable withholding, credits TDS payable, and provides the data required for quarterly Form 140/138 filings.

Question 53

Does bookkeeping include TDS return filing?

Accepted Answer

No. Bookkeeping accounts for the expense and tax liability in internal ledgers. Filing the quarterly TDS statement on TRACES is a separate direct tax service.

Question 54

What is telecom business bookkeeping?

Accepted Answer

Specialized accounting tailored for ISPs, VNOs, and carriers, handling subscriber recurring billing, upstream bandwidth costs, telecom equipment capitalization (OLTs/routers), and AGR-relevant data segregation.

Question 55

How are broadband subscriber revenues recorded?

Accepted Answer

Revenues from monthly, quarterly, or annual internet packages are recognized on an accrual basis, with advance subscription collections credited to unearned revenue and recognized over the billing cycle.

Question 56

How does bookkeeping support Adjusted Gross Revenue (AGR) compliance?

Accepted Answer

Bookkeeping segregates telecom operational revenue from non-telecom income and tracks inter-operator pass-through payments, providing the reconciled ledger figures needed for DoT SARAS filings.

Question 57

How are upstream bandwidth and dark fibre expenses recorded?

Accepted Answer

Invoiced charges from carrier partners (Tata, Airtel, BSNL) are verified against service delivery orders, debited to network operating expenses, checked for TDS, and reconciled against bank payments.

Question 58

How are routers, ONUs, and OLT equipment handled in bookkeeping?

Accepted Answer

Network core hardware is capitalized in the Fixed Asset Register with appropriate depreciation. Customer premise equipment (CPE/ONTs) is treated as capital assets or consumable inventory depending on recovery policies.

Question 59

What is backlog bookkeeping and books clean-up?

Accepted Answer

The forensic accounting exercise of reconstructing months or years of unrecorded transactions, clearing suspense accounts, reconciling historic bank statements, and bringing delinquent books up to date.

Question 60

Can TeleTax Solutions maintain day-to-day business books?

Accepted Answer

Yes. TeleTax Solutions provides full outsourced bookkeeping, managing daily invoice entries, bank reconciliations, vendor payables, customer ledgers, and monthly closing reports.

Question 61

Is TeleTax Solutions a statutory auditing firm?

Accepted Answer

No. TeleTax Solutions is an independent corporate advisory and compliance consultancy providing accounting, bookkeeping, and tax support. Statutory audits under the Companies Act are conducted by independent practicing Chartered Accountants.

Question 62

How does bookkeeping support year-end statutory and tax audits?

Accepted Answer

Reconciled bank books, matched debtor/creditor ledgers, verified fixed asset registers, and balanced trial balances allow external auditors to complete statutory audits quickly without audit qualifications.

Question 63

What accounting software does TeleTax support?

Accepted Answer

We work across industry-standard platforms including TallyPrime, Zoho Books, QuickBooks, SAP, and custom cloud ERP systems.

BOOKKEEPING & ACCOUNTING

BOOKKEEPING ≠ GST RETURN FILING ≠ TDS FILING ≠ AUDIT

WHAT IS BOOKKEEPING?

DEBIT VS CREDIT RULES ACROSS 5 ACCOUNT TYPES

BUSINESS BOOKS CONTROL DASHBOARD

Sales Invoice Recording, Customer Ledgers & Ageing Analysis

HOW A TRANSACTION ENTERS THE BOOKS

YOUR DEDICATED BUSINESS BOOKKEEPING TEAM

TeleTax Bookkeeping Scope

BOOKKEEPING & ACCOUNTING SUPPORT ACROSS INDIA

FREQUENTLY ASKED QUESTIONS

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