Meaning of gain in tally Accounting
What is gain and how is it calculated in tally. Often people take income and gain as one, but these two are completely different. If a person buys an item for Rs.20000/- and when the person sells that item for Rs.25000/-, he gets a profit of Rs.5000/-, then he is known as gain in tally. Gain can be on any assets and can also be on capital. In simple words, if you get more money for the item purchased on less assets, then the amount received is called gain.
Understanding Gain in Tally Accounting
When a person starts a business, he has to buy many assets. There are many types of assets. like:- land, building, cars, bikes, computers. Printers, office. And when the business is started then all these assets are used by the businessman. When the balance sheet of the business is audited at the end of the year, its value is reduced by applying depreciation according to the assets. Now take the goods, the businessman bought a computer for 45000/ – and after depreciation the price of that computer is 20000/ – in the books of the businessman. If the businessman sells that computer to a person for 25000/ – then the businessman will have a gain of 5000/ -. The person also invests only to get profit so that he can get more of its value in the coming time.
Examples of gain in tally Accounting
Friends, it is not necessary that the gain is only on any fixed assets. Any person or businessman buys a lot of assets for his future and also makes investments like FD, gold, shares, building, land, plots etc. This investment person makes only with the expectation of gain in future. And if a plot person has purchased for 200000/- and if he gets 250000/- by selling plot then he has gained 50000/-, thus this gain also happens on asset, gold, FD etc.
What are difference between income and gain
Income and gain only benefit any businessman or person. But the method of these two is different. Any businessman incurs expenses before starting any business, the reason for which is to get income. But gain occurs in the case when the value of your assets is less in your books and you sell it for more money. It is not the intention of any person that he can buy assets and use them and sell them later. Whereas a person does his business to earn income.