Friends, in this clip, we are going to do the matching
concept.
To understand the matching concept, you will have to come
to the pad.
And I will take you to an example.
With an example, we will understand this matching concept
well.
Let's write an example with me.
Messers Ranveer Traders
Sir, is this Ranveer Singh Traders or just Ranveer Traders?
It's just Ranveer Traders.
Now that Ranveer Singh has come to mind, let's go.
You will get help in imagination.
Started a cloth business
Anyway, his cloth business will run.
He wears very straight clothes.
He purchased
He purchased 10,000 pieces of garments at the rate of Rs.
100 per piece
He sold 8,000 pieces at the rate of Rs.
150 per piece
at the rate of Rs.
150 per piece during 1st January 2015 to 31st December 2015
Full stop
He paid shop rent of 11 months totaling Rs.
33,000 totaling Rs.
and paid Rs.
8,00,000 to the suppliers
Full stop
He also received
He also received Rs.
10,00,000 from the customers
from the customers
Friends, please write it down
You have 10 seconds
After writing, I will do its Hindi and then we will solve
it and see how it works by teaching us matching concepts
Come friends
Write it down 10, 9, 8, 7, 6, 5, 4, 3, 2, 1
Friends Ranveer is the owner of Messers
Ranveer is the owner of Messers
He started a cloth business
He starts trading
He buys and sells clothes in the wholesale
He purchased 10,000 pieces of garments at the rate of Rs.
100 per piece
My dear friends
He purchased 10,000 pieces of garments at the rate of Rs.
100 per piece
He purchased 10,00,000
He purchased 10,00,000 and paid Rs.
8,00,000 to the supplier
He purchased 10,00,000 and paid Rs.
First, I have taught you the accrual concept
Now you tell me
How much will be the purchase cost?
Rs. 10,00,000 or Rs.
The war is going on between Rs.
10,00,000 and Rs.
Whom will you vote for?
Sir, Rs.
10,00,000 will be considered as the cost and not Rs.
Thumbs up to you all
This is what the accrual concept says
Look at the transaction of Rs.
Don't look at the payment
The entire expense will be recorded
Rs. 10,00,000 for Rs.
Whether you are doing payment today or later
It doesn't matter
If you keep looking at the payment
Then you will be after the payment
We buy and enter
The purchase will be considered as Rs.
Then out of those 10,000 pieces
Out of those 10,000 pieces
We sold Rs.
8,000 pieces
At the rate Rs.
150 per piece
Then out of those 10,000 pieces
We sold Rs.
8,000 pieces
At the rate Rs.
150 per piece
So the total is Rs.
8,000 into Rs.
Rs. 12,00,000
Whereas Received Rs.
10,00,000 from customers
How much did the customers give us?
Only Rs.
But the sale will be considered as Rs.
According to the accrual concept
That's why the accrual concept
Has been told to you in the previous clips
Because to understand matching
Accrual is necessary
Accrual concept says
How much money did you get from the sale?
You got everything today
You will get everything later
It doesn't matter
No matter how much sale you take
It is your sale as it is
Whatever you sold
It will be considered as your total revenue
He paid shop rent of 11 months
He paid Rs.
You do accounting from 1st January 2015
Till 31st December 2015
For 12 months
He said that he paid the rent of 11 months
Rs. 33,000
How much did he pay for 1 month?
Rs. 3,000
Accrual concept says
The entire record of 12 months
Will be recorded as Rs.
3,000 per month
The total expense of rent is Rs.
After this, nothing else is written
So far, the talks were from the accrual concept
Yes So friends
Now you make me profit
Now you will say that it is very easy
From the revenue
Minus the expenses
And profit will come out
This was our accrual concept
Accrual concept taught us
Not 10 lakhs in revenue, but 12 lakhs in total
Not 8 lakhs in purchase, but 10 lakhs in total
Rent is not 33,000
So we know
Revenue is 12 lakhs
Minus expenses 10 lakhs 36,000 10,36,000 Profit is 12 lakhs
minus 10 lakhs 36,000 1,64,000 All the people who are saying
Profit is 1,64,000 1,64,000 All those people are wrong
Sir, you are wrong
First, you do all the calculations
And bring everything on track
As if we are doing the right thing
And at the last moment, you deny us
That this is not profit
Sir, why are you saying this?
First, tell us
Friends, listen
You have applied the accrual concept right
You took 12 lakhs in sale
You took 10 lakhs in purchase
You took 36,000 in rent
Very good
But after that 12,36,000 is 1,64,000
Then what is the mistake?
You are taking 12 lakhs in sale
You are not taking 10 lakhs
Because customer has given 10 lakhs
You are taking 12 lakhs
But this sale is of how many pieces?
Sale of 8000 pieces
Sir, 8000 into 1,5
You are not taking 8 lakhs in purchase
You are taking 10 lakhs
Because payment is not important
Accrual concept says
Record the purchase
But this purchase of 10 lakhs
How many pieces is this?
This is a purchase of 10,000 pieces
This is a problem
You are taking a sale of 8000 pieces
And from that
You are reducing the purchase of 10,000 pieces
This is wrong
The 2,000 pieces that have not yet been sold
How are you including them
In the calculation of profit?
If you have taken here
Expenses total 10,36,000 In which you have taken purchase
of 10 lakhs
Recording the purchase of 10 lakhs
Means you have included the purchase of 10,000 pieces
In the calculation of profit
Whereas 2,000 pieces have not yet been sold
How will you make profit on them?
When they will be sold
Then you will see how much was sold and how much was bought
Then you will make profit on them
That's why my dear friends
The 10,36,000 here
This is wrong
Because of which the profit is also wrong
If The sale is of 8000 pieces
Then the purchase is also
Not of 8000 pieces 8000 x 100
Means 8 lakhs
This is not the 8 lakhs that we paid to the supplier
No no no
We did not take 8 lakhs for that
If the sale is of 8000 pieces, then the purchase will also
be of 8000 pieces
If it was written here
Paid 7 lakhs to the supplier
Even then we would have taken 8 lakhs
Plus 36,000 So my friend 8,36,000 12-8,36,000 My actual
profit will come out 3,64,000 And this is your matching
concept
The purchase you have
Not taking 10 lakhs for 10,000 pieces
If you have taken 8 lakhs for 8000 pieces
This is the matching concept
You have done this work on the basis of matching concept
Matching concept
Says play matching
If you are taking a sale of 8000 pieces
Then take a purchase of 8000 pieces
If you are taking a sale of 8000 pieces
Then take a purchase of 8000 pieces
If the whole 10,000 pieces have been sold
Then take a purchase of 10 lakhs
This says matching
Concept Let's see what is written in the notes
Let's see
The matching concept states that
Revenue and expenses incurred to earn the revenue
Must belong to the same accounting period
Related to the same period and you have to minus the
expenses related to that period.
For example, why did we not minus the purchase of 2000?
Because it will be sold next year, not in this period.
All the pieces sold in this period are 8000.
All the pieces sold in this year are 8000.
Take the purchase of the same piece.
Hence, one revenue is realized.
The next step is to assign the relevant accounting period.
For example, here is another example.
If you pay a commission to a salesperson for the sale that
you record in March, the commission should also be recorded
in the same month.
The matching concept implies that all the revenue earned
during an accounting period, whether received or not during
that year, all expenses incurred, whether paid or not
during the year, should be considered while determining
profit and loss.
The matching concept also says that we do not have to take
10 lakhs.
We do not have to take 8 lakhs for the purchase.
We have to take 10 lakhs for the entire payment.
We do not have to take 10 lakhs for the sale.
We have to take 12 lakhs for the total amount of money
received from the customer.
This is also called the equal concept and matching concept.
This enables the investor and shareholder to know the exact
profit and loss of the business.
And by following this concept, the exact profit and loss of
the business is determined.
This was the matching concept.
Remember the example.
You will forget English.
You will remember things from the example.
Thank you.