GSEB Class 11 Solutions Chapter 8 Introduction of Deshi Nama System

 

Question 1. Which is the oldest Indian method of writing books of accounts?
(a) Deshi Nama System
(b) Double Entry System
(c) Single Entry System
(d) Deshi Nama and Double Entry System
Answer: (a) Deshi Nama System
In simple words: The Deshi Nama System represents the earliest way people in India kept track of their business accounts. It is a very old and traditional accounting method from the region.

Exam Tip: Understand the historical context of accounting systems. Deshi Nama System is crucial for recognizing traditional Indian business practices.

 

Question 2. What is called 'J' sign used in Deshi Nama between rupees and paise while writing an amount?
(a) Avro
(b) Olayo
(c) Utero
(d) Fanku Marvu
Answer: (b) Olayo
In simple words: When writing money in the Deshi Nama style, the little 'J' symbol that appears between the rupees and paise part of an amount is called Olayo. This sign separates the two currency units.

Exam Tip: Be aware of the specific terminology and symbols used in the Deshi Nama system, as they differ from modern accounting.

 

Question 3. Out of the following, what is called 'Sudiu' or 'Daniu'?
(a) Subsidiary book
(b) Bethel
(c) Kachi Nondh
(d) Rojmel
Answer: (c) Kachi Nondh
In simple words: In Deshi Nama accounting, the terms 'Sudiu' or 'Daniu' refer to a type of rough entry record known as Kachi Nondh. This helps in temporary recording before final entries.

Exam Tip: Familiarize yourself with alternate names for common accounting books in Deshi Nama, as different regions might use varied terminology.

 

Question 4. Which books in Deshi Nama are called as Basic or Primary books?
(a) Aam Nondh
(b) Karar Nondh
(c) Khatavahi
(d) Rojmel
Answer: (d) Rojmel
In simple words: In the Deshi Nama accounting approach, the main or primary record books are known as Rojmel. These important books capture initial business dealings.

Exam Tip: Recognize Rojmel as the foundational book of original entry in Deshi Nama, similar to a journal in double-entry systems.

 

Question 5. Which Mel is known as Thammel ?
(a) Rojmel
(b) Jama-Kharchi mel
(c) Bethomel
(d) Daginamel
Answer: (c) Bethomel
In simple words: Among the different types of 'Mel' records, Bethomel is also called Thammel. This alternative name helps in identifying this particular record-keeping method.

Exam Tip: Remember that "Thammel" is an alternative term for Bethomel, which is another type of main book in Deshi Nama, often used by smaller traders.

 

Question 6. If the name of a person with whom financial transaction has been taken place is forgotten, the financial transaction is recorded by which name?
(a) Shri Tasalmat Khate
(b) Shri Shah Khate
(c) Shri Haththu Khate
(d) Shri Vatav Khate
Answer: (b) Shri Shah Khate
In simple words: If a business forgets the name of the person involved in a money dealing, that dealing is written down under the name Shri Shah Khate. This is used as a temporary name until the actual person is recalled.

Exam Tip: Learn the specific provisional accounts used in Deshi Nama for situations like forgotten names or uncertain accounts, such as Shri Shah Khate.

 

Question 7. The amount payable to a creditor of the business is sent through a person or aangadia, the amount is credited to which account instead of creditor?
(a) Shri Haththu Khate
(b) Shri Shah Khate
(c) Shri Deshavar Khate
(d) Shri Tasalmat Khate
Answer: (a) Shri Haththu Khate
In simple words: When a business sends money to a creditor using an intermediary person, the amount is credited to the Shri Haththu Khate. This is done instead of directly crediting the creditor's account initially.

Exam Tip: Understand how Deshi Nama handles payments made through agents or intermediaries, using accounts like Shri Haththu Khate for proper tracking.

 

Question 8. When money is lended to a person for one day, the amount is known by which name?
(a) Ublek
(b) Upartapke
(c) Deshavar
(d) None of the options
Answer: (b) Upartapke
In simple words: If money is loaned to someone for a single day, this specific type of short-term lending is called Upartapke. It refers to very brief financial arrangements.

Exam Tip: Differentiate between various types of temporary financial arrangements and their specific names in Deshi Nama, such as Upartapke for one-day loans.

 

Question 9. Transactions of credit purchase of goods of business are recorded in which subsidiary books?
(a) Jama Nondh
(b) Udhar Nondh
(c) Kabalavahi
(d) Hundivahi
Answer: (a) Jama Nondh
In simple words: When a business buys items on credit, these dealings are put into the subsidiary books called Jama Nondh. This book specifically keeps track of all credit purchases.

Exam Tip: Remember that credit purchase transactions are specifically recorded in the Jama Nondh (or Kharid Nondh) in the Deshi Nama system.

 

Question 10. The books kept in Deshi Nama for recording receipt and issue of goods is known by which name?
(a) Ankdavahi
(b) Sudhavahi
(c) Kabalavahi
(d) Janasvahi
Answer: (d) Janasvahi
In simple words: In Deshi Nama, the books that keep track of when goods come in and go out are called Janasvahi. This helps in managing and monitoring the movement of inventory.

Exam Tip: Identify Janasvahi as the stock register or goods movement book in Deshi Nama, important for inventory management.

 

Question 11. Which book is maintained by the traders of forward market to record forward transactions?
(a) Hundivahi
(b) Kabalavahi
(c) Sudhavahi
(d) Vyajvahi
Answer: (b) Kabalavahi
In simple words: Traders who deal in future market transactions use a specific book called Kabalavahi to write down their forward dealings. This book helps manage future agreements.

Exam Tip: Understand that Kabalavahi is the specialized book for forward market transactions in Deshi Nama, essential for businesses dealing with future contracts.

 

Question 12. Havalamel is known by which name?
(a) Utero
(b) Sarvaiyun
(c) Rojmel
(d) Achalmel
Answer: (d) Achalmel
In simple words: The Havalamel, which brings together various adjustments, is also referred to as Achalmel. This alternate name identifies its role in finalizing accounts.

Exam Tip: Note that "Achalmel" is another name for Havalamel, which is a crucial book used for making adjustment entries at the end of an accounting period in Deshi Nama.

 

Question 13. Which account of the following is not Kachu Khatu?
(a) Shri Ghar-Kharch Khatu
(b) Shri Pagar Khatu
(c) Shri Vakara Khatu
(d) Shri Commission Khatu
Answer: (a) Shri Ghar-Kharch Khatu
In simple words: A 'Kachu Khatu' is a temporary account that gets closed at the end of the year, like expenses or income. While 'Shri Ghar-Kharch Khatu' generally represents household expenses or drawings, it's considered to *not* be a typical nominal Kachu Khatu in the context of this question, suggesting a distinction based on its nature as a personal expense linked to capital.

Exam Tip: Be precise with the classification of accounts in Deshi Nama; Kachu Khata are nominal accounts, while Paka Khata are real and personal accounts. Shri Ghar-Kharch Khatu, though an expense, can sometimes be treated differently depending on context related to owner's drawings.

 

Question 14. Which accounts are closed at the end of the year in Deshi Nama?
(a) Paka Khata
(b) Kacha Khata
(c) Milk at Khata
(d) Personal accounts
Answer: (b) Kacha Khata
In simple words: In the Deshi Nama accounting system, the accounts that are officially closed at the end of each financial year are known as Kacha Khata. These usually include income and expense accounts.

Exam Tip: Understand that Kacha Khata (nominal accounts) are temporary and closed at year-end, unlike Paka Khata (real and personal accounts) which carry forward balances.

 

Question 15. Where the entry of closing Kacha Khata in Deshi Nama is made?
(a) Sudhavahi
(b) Jama-Kharchi Mel
(c) Jamavahi
(d) Udharvahi
Answer: (b) Jama-Kharchi Mel
In simple words: To finish up Kacha Khata accounts in Deshi Nama, the closing entry is made in the Jama-Kharchi Mel. This book is used for aggregating income and expense items.

Exam Tip: Recognize Jama-Kharchi Mel as the book where closing entries for nominal accounts (Kacha Khata) are made, consolidating income and expenditure.

 

Question 16. Where the Paka Khata are recorded, in Deshi Nama System?
(a) Havalamel
(b) Kharid-Vakara Khata
(c) Vatav Khata
(d) Sarvaiyun
Answer: (d) Sarvaiyun
In simple words: In the Deshi Nama accounting method, the Paka Khata, which are permanent accounts, are recorded in the Sarvaiyun. This document is like a balance sheet, showing the financial position.

Exam Tip: Understand that Paka Khata (real and personal accounts) are permanent and their balances appear in the Sarvaiyun (Balance Sheet) in Deshi Nama.

 

Question 17. The difference between the credit side and the debit side of Sarvaiyun in Deshi Nama recorded on debit side as
(a) Akhar stock
(b) Silak Vadh-ghat
(c) Shri Purant Janse
(d) Shri Purant Baki
Answer: (d) Shri Purant Baki
In simple words: The leftover amount or balance from comparing the credit and debit sides of the Sarvaiyun in Deshi Nama, when placed on the debit side, is known as Shri Purant Baki. This represents the closing balance.

Exam Tip: Identify Shri Purant Baki as the closing balance when the debit side of the Sarvaiyun is used to record the net difference, signifying the assets at hand.

 

Question 18. In Deshi Nama System, the nature of Sarvaiya is like
(a) Utaro
(b) Daginamel
(c) Rojmel
(d) Udhar Nondh
Answer: (a) Utaro
In simple words: In Deshi Nama, the Sarvaiya acts much like an Utaro. Both documents serve a similar purpose in presenting a summary of accounts.

Exam Tip: Understand that Utaro functions as a summary statement in Deshi Nama, comparable to a trial balance or a simple balance sheet, reflecting the nature of the Sarvaiya.

 

Question 19. Which value of closing stock is taken into consideration for Havala Nondh of Akhar stock to calculate profit or loss at the end of the year?
(a) Cost price
(b) Market price
(c) Cost price or market price, whichever is less
(d) Cost price of market price, whichever is more
Answer: (c) Cost price or market price, whichever is less
In simple words: To figure out the profit or loss for the year using Havala Nondh for closing stock, we always pick the lower value between its original buying price and its current selling price. This ensures a careful and conservative estimate.

Exam Tip: The principle of "cost or market price, whichever is less" is a fundamental accounting convention (conservatism) also applied in Deshi Nama for valuing closing stock.

 

Question 20. Profit or loss of Kharid-Vakara Khata is transferred to which account while preparing final accounts by Vatav Khata method in Deshi Nama?
(a) Bhandol Khate
(b) Vatav Khate
(c) Havalamel
(d) Ghar-Kharch Khate
Answer: (b) Vatav Khate
In simple words: When getting final accounts ready using the Vatav Khata method in Deshi Nama, any profit or loss from the Kharid-Vakara Khata is moved into the Vatav Khate. This centralizes the final profit/loss calculation.

Exam Tip: Understand the flow of profit/loss transfers between specific accounts (like Kharid-Vakara Khata to Vatav Khate) when using the Vatav Khata method in Deshi Nama.

Question 2. Answer the Following Questions in One or Two Sentences:

 

Question 2.1. By which other name the Deshi Nama System is known?
Answer: The Deshi Nama System is additionally recognized as 'Vahi Khata Paddhati'. This is another way to refer to this traditional Indian accounting method.

Exam Tip: Remember both "Deshi Nama System" and "Vahi Khata Paddhati" as interchangeable terms for this indigenous accounting practice.

 

Question 2.2. Explain the meaning of 'Miti' in Deshi Nama.
Answer: In Deshi Nama, 'Miti' refers to the date, including Vikram Samvat, Deshi Mass, Paksha, and Tithi. For instance, Samvat 2072 Kartak Sud 9 is an example of Miti.

Exam Tip: Miti is not just a date; it's a specific traditional calendar reference used in Deshi Nama, combining several temporal elements.

 

Question 2.3. What is Rojmel?
Answer: Rojmel is a fundamental or main book in Deshi Nama accounting. Businessmen create Rojmel records daily with help from vouchers and a rough book. Rojmel is written every day, and its closing balance is also figured out each day, which is why it is called Rojmel.

Exam Tip: Rojmel is the daily cash book and journal of Deshi Nama; its daily preparation and balance calculation are key characteristics.

 

Question 2.4. By whom and when the Bethomel is kept?
Answer: Small traders typically keep a Bethomel. They maintain it when their daily business dealings are relatively few, making it a suitable record-keeping choice for smaller operations.

Exam Tip: Bethomel is a simplified version of Rojmel, specifically designed for small traders with fewer transactions, helping them manage accounts efficiently.

 

Question 2.5. State any two types of Khatavahi.
Answer: In Deshi Nama, there are three distinct types of Khatavahi: 1. Simple (Sadi) Khatavahi, 2. Bethi Khatavahi or Tham Khatavahi, and 3. Sama Daskatni Khatavahi. Each type serves a specific purpose in ledger maintenance.

Exam Tip: Be able to list and briefly describe the different types of Khatavahi (ledgers) in Deshi Nama, as they cater to various business needs.

 

Question 2.6. What is 'Sakadiyu' or 'Panotri?
Answer: The index of the Khatavahi is known as 'Sakadiyu' or 'Panotri'. This index allows us to easily find out which account is recorded on a particular page within the Khatavahi.

Exam Tip: 'Sakadiyu' or 'Panotri' acts as a table of contents for the Khatavahi, enabling quick navigation and referencing of accounts.

 

Question 2.7. When there is expense or revenue in business, but the name of the account is not remembered, such transaction is recorded in which account?
Answer: When a business has an expense or income but cannot recall the specific account name, that dealing is written to 'Shri Tasalmat Khate.' This account serves as a temporary holding place.

Exam Tip: 'Shri Tasalmat Khate' is used as a suspense-like account for transactions where the specific expense or income account is initially unknown.

 

Question 2.8. What is Ublek amount?
Answer: Whenever an amount of money is loaned to a person within the business for just a few days, that amount is specifically termed as Ublek amount. It refers to a very short-term loan.

Exam Tip: Ublek amount is a unique term in Deshi Nama for extremely short-duration loans, highlighting the temporary nature of the financial arrangement.

 

Question 2.9. What is Tarija?
Answer: At the month's end, the combined amounts of Jama Nondh are posted to Shri Kharid Khate, and the combined amounts of Udhar Nondh are posted to Shri Vakra Khate. These combined totals are known as Tarij, which is essentially a summary.

Exam Tip: Tarij acts as a monthly summary or reconciliation statement, ensuring all entries from Jama Nondh and Udhar Nondh are properly transferred and balanced.

 

Question 2.10. What is Jangad Nondh?
Answer: In Deshi Nama, the particular book where Jangad sale transactions are recorded is known as Jangad Nondh. This book specifically keeps track of goods sent on approval or consignment.

Exam Tip: Jangad Nondh is essential for tracking goods sent on a "sale or return" basis, ensuring that such transactions are only treated as sales upon customer confirmation.

 

Question 2.11. What is Fanku Marvu?
Answer: After a transaction's posting is finished, a specific sign (0) is placed in the first fold beneath the transaction's amount in Rojmel, Bethomel, or Peta Nondh. This mark shows that the posting is complete, and this marking process is known as 'Fanku Marvu'.

Exam Tip: 'Fanku Marvu' is an internal control mechanism in Deshi Nama, signifying that an entry has been correctly transferred or posted, preventing errors.

 

Question 2.12. What is Khatanu Sandhan?
Answer: The operation of carrying forward an account's balance to other blank pages is called 'Khatanu Sandhan'. This process ensures continuity of records when a ledger page is full.

Exam Tip: 'Khatanu Sandhan' is akin to folio balancing and carrying forward, a practical aspect of maintaining continuous ledger accounts in Deshi Nama.

 

Question 2.13. What is Mand-Chhod Mel?
Answer: Entries must be passed to apply the accounting impacts of havalas and to close Kacha Khata, transferring them to other accounts (e.g., Shri Kharid-Vakra Khate). The process prepared with this goal is called Mand-Chhod Mel or Havalamel.

Exam Tip: Mand-Chhod Mel (or Havalamel) is a crucial step in Deshi Nama for making all year-end adjustments and closing temporary accounts before preparing final statements.

 

Question 2.14. Generally, when is the Havalamel prepared?
Answer: The Havalamel is generally prepared at the very end of an accounting period. This ensures all adjustments are made before the final accounts are generated.

Exam Tip: Remember that Havalamel is a year-end or period-end adjustment sheet, vital for accurate financial reporting in Deshi Nama.

 

Question 2.15. Which two methods are prevalent in Deshi Nama for calculating profit or loss?
Answer: In Deshi Nama, two principal methods are commonly used to calculate profit or loss: 1. The Kharid-Vakra Khata method and 2. The Vatav Khata method. Each provides a structured way to determine business performance.

Exam Tip: Be able to identify and distinguish between the Kharid-Vakra Khata method and the Vatav Khata method, as they are the primary profit/loss calculation approaches in Deshi Nama.

 

Question 2.16. Write Havala Nondh for Vyaj on Bhandol.
Answer: The Havala Nondh for Vyaj on Bhandol is as follows:
Vyaj on Bhandol Khate Udhar
Bhandol Khate Jama.

Exam Tip: Practice writing Havala Nondh entries for common adjustments like interest on capital (Vyaj on Bhandol) to ensure correct debit and credit placement.

 

Question 2.17. Write Havala Nondh for Ghal-Khadh Anamat.
Answer: The Havala Nondh for Ghal-Khadh Anamat is written as:
Kharid-Vakra Khate Udhar
Ghal-Khadh Anamat Khate Jama.

Exam Tip: Familiarize yourself with Havala Nondh entries for specific provisions like Ghal-Khadh Anamat (provision for doubtful debts), understanding which accounts are debited and credited.

 

Question 2.18. Write Havala Nondh for transferring profit calculated from Kharid-Vakara Khate to Bhandol Khate.
Answer: The Havala Nondh for transferring profit from Kharid-Vakara Khate to Bhandol Khate is:
Kharid-Vakra Khate Udhar
Bandol Khate Jama.

Exam Tip: Ensure you know how to record the transfer of profit (or loss) from the trading account (Kharid-Vakara Khate) to the capital account (Bhandol Khate) using Havala Nondh.

 

Question 2.19. Write Havala Nondh for transferring loss calculated from Vatav Khata to Bhandol Khate.
Answer: The Havala Nondh for transferring loss calculated from Vatav Khata to Bhandol Khate is:
Bhandol Khate Udhar Vatav Khate Jama.

Exam Tip: Correctly recording loss transfers (debiting capital and crediting the profit/loss account) using Havala Nondh is vital for accurate final accounts.

 

Question 2.20. What is called Paka Khate in Deshi Nama System.
Answer: The accounts which are not closed at the end of the year, but their balances are carried forward to the following year, are referred to as 'Paka Khata'. These are permanent accounts.

Exam Tip: Paka Khata represents permanent accounts (like asset, liability, and capital accounts) whose balances are carried forward, distinguishing them from temporary Kacha Khata.

Question 3. Answer Following Questions in Short:

 

Question 3.1. Explain Avro.
Answer: 'Aavro' refers to transactions initially recorded in the Rojmel, Bethomel, and Peta Nondh that are then re-recorded in another specific book after a period of fifteen days or a month. This book is called 'Aavro'. Aavro is a book that details all business transactions. All dealings noted in Rojmel or Bethomel and subsidiary books are again entered into this book after the specified period. Aavro is prepared much like Rojmel and utilizes a book with pages containing eight folds. All transactions recorded in Aavro are used to arrive at the closing balance (Purant Baki). This closing balance is then matched with the balance from Rojmel or Bethomel. Accounting accuracy is maintained by registering all business transactions in Aavro. 'Aavro' also serves as a tool to identify and control errors across all transactions recorded in the books. Generally, 'Aavro' is kept by money lenders and large businessmen.

Exam Tip: Avro is a crucial summary book in Deshi Nama, acting as a periodic register for verification, error detection, and maintaining overall accounting accuracy, often used by larger firms.

 

Question 3.2. Explain Vigat Khatu.
Answer: Vigat Khatu is used when there are numerous transactions with a single person, or when a dealing relates to expense or income, and a separate account is not opened for each individual transaction. The total amount is debited or credited to the Vigat Khatu, and other specifics of this Khatu are shown in an inner column. However, if there is no direct posting to Vigat Khatu, all accounts are posted separately. This approach saves both time and effort.

Exam Tip: Vigat Khatu streamlines accounting by grouping similar or frequent transactions with one party, reducing the number of individual accounts to maintain and saving time.

 

Question 3.3. Explain Shah Khatu.
Answer: Shah Khatu is used when an amount is received from or paid to someone whose name the trader has forgotten. The amount is immediately recorded to Shri Shah Khate, and the Rojmel or Bethomel is closed. When the name is recalled, a reverse entry is passed against Shri Shah Khate, and the correct entry is posted to that person's account. If the person's name cannot be disclosed, Shri Shah Khate is used in that case as well.

Exam Tip: Shri Shah Khate acts as a temporary suspense account for unknown parties; it's crucial for maintaining continuous records even when specific details are missing initially.

 

Question 3.4. Explain Tasalmat Khatu.
Answer: Tasalmat Khatu is used when any expense or income is incurred by the trader but the reason is forgotten, or the specific account cannot be figured out. It is temporarily transferred to Tasalmat Khatu, and the Rojmel is closed. Later, when the reason is recalled or the correct account is identified, the Tasalmat Khatu is closed by making an opposite entry, and the amount is debited or credited to the correct account. Tasalmat Khatu is quite similar to a suspense account under the Double Entry System of accounting.

Exam Tip: Tasalmat Khate handles unclear expenses or income, acting as a suspense account. It is resolved once the true nature or related account for the transaction is identified.

 

Question 3.5. Explain Deshavar Khatu.
Answer: Deshavar Khatu is used when the business owner, salesman, or any other person travels out of station for business and receives a lump sum for expenses. This amount is not debited to their personal account but to that individual's Deshavar Khatu. If they collect money from debtors during the tour, it is also debited to Deshavar Khatu, and any payments made on behalf of the business are credited to Deshavar Khatu. When they return, they provide details of their account, and appropriate entries are made to close the Deshavar Khatu by crediting the amount. Deshavar Khatu is a temporary account.

Exam Tip: Deshavar Khatu tracks expenses and collections made by traveling personnel on business trips, ensuring proper accounting for official travel and related transactions.

 

Question 3.6. Explain Haththu Khatu.
Answer: Haththu Khatu is used to make payments to a creditor when the trader sends the amount through a clerk, munim, or aangadia. The amount is not debited to the creditor's account but to the clerk's, aangadia's, or munim's Haththu Khatu. After receiving the money receipt from the creditor, Haththu Khatu is credited, and the creditor's account is debited. This way, the Haththu Khatu is closed. Haththu Khatu is a temporary account, used for tracking payments made via intermediaries.

Exam Tip: Haththu Khatu functions as an intermediary account, ensuring that payments made through agents are correctly recorded and eventually cleared once the payment reaches the creditor.

 

Question 3.7. Explain Kabulat Apvi (to be given).
Answer: Kabulat Apvi (to be given) occurs when, based on mutual agreement, a businessman agrees to pay an amount, owed to a creditor, to another person. This action is known as Kabulat (Acceptance). Similarly, if a businessman agrees to accept an amount from another person instead of from their debtor, it is also called Kabulat (Acceptance). Kabul impacts the businessman's debt and receivables, relying on the consent of both the debtor and the creditors. For example, if Anish owes Rs. 5,000, and Arjun accepts this payment responsibility.

In simple words: Kabulat Apvi means agreeing to transfer a debt or a receivable to a different person with everyone's permission. It changes who owes or is owed money.

Exam Tip: Kabulat Apvi illustrates a form of assignment of debt or credit in Deshi Nama, requiring mutual understanding and consent among all involved parties. Pay attention to how it affects the original debtor and creditor.

 

Question 3.8. Explain Bethi Khatavahi.
Answer: Small businessmen, who have comparatively fewer transactions, only keep creditor and debtor accounts in their Khatavahi (ledger). These businessmen record the entire transaction directly in the account when posting, allowing them to quickly know receivables and payables. Such an account is known as Betha Khata, and this type of Khatavahi is called Bethi Khatavahi or Tham Khatavahi. Instead of noting credit purchases and credit sales in Rojmel or Bethomel, they are directly recorded in the Bethi Khatavahi. Therefore, Bethi Khatavahi serves both the purpose of Rojmel and Khatavahi.

Exam Tip: Bethi Khatavahi is a simplified ledger for small businesses, integrating the functions of both the journal (Rojmel) and the ledger (Khatavahi) for ease of tracking individual debtors and creditors.

 

Question 3.9. Explain Kandhu Kari Apvu.
Answer: Kandhu simply means an instalment. When an amount that is due from a person is divided and fixed into smaller, regular payments, it is referred to as Kandhu Kari Apvu. The amount allocated for each individual instalment is called the amount of kandhu.

Exam Tip: Kandhu Kari Apvu formalizes installment payments, which is a practical way to manage large receivables by breaking them into manageable, fixed portions over time.

 

Question 3.10. Explain Kothali Chhodamani.
Answer: Often, when a moneylender provides a loan, they subtract some amount from the total loan and then pay the remaining sum to the borrower. This deducted portion is known as Kothari Chhodamani or Mandamani. This subtracted amount serves as income for the moneylender and an expense for the borrower. The total amount (original loan plus Mandamani) is debited to the borrower's account by the moneylender.

Exam Tip: Kothali Chhodamani is a form of discount or upfront interest deduction common in traditional lending, representing income for the lender and a cost for the borrower.

 

Question 3.11. Explain Daginamel.
Answer: The account book that is kept to track the receipt and issue of goods is known as Daginamel. Daginamel functions like a stock register, recording the receipt, issue, and other details of stock items. Daginamel is also known as Janasvahi or Stockvahi. Today, printed books are available for Daginamel, making it widely used. Some businessmen prepare Daginamel like Rojmel, with pages having eight folds and two columns for Jama and Udhar entries.

Exam Tip: Daginamel is essentially the inventory record book in Deshi Nama, vital for managing and monitoring the movement and balances of goods in stock.

 

Question 3.12. Explain Aankadavahi.
Answer: In this book, personal accounts for parties (debtors) are opened, and their daily postings are done from the Rojmel, Bethomel, and Udhar Nondh. This book does not provide all types of information, but only details like the transaction amount, date (miti), and the Rojmel or Udhar Nondh page number. From this Khatavahi, the amount receivable from customers and other necessary information can be found for the collection clerk. Pakki Khatavahi is prepared based on the Aankadavahi, allowing any errors or mistakes to be identified. Aankadavahi is also called Sudhavahi or Kachi Khatavahi.

Exam Tip: Aankadavahi is a subsidiary ledger focused on personal accounts (debtors), providing key transaction details for collection and reconciliation purposes in Deshi Nama.

 

Question 3.13. Explain Jangad Nondh.
Answer: Jangad Nondh refers to goods sent to a customer on the condition that they may keep the goods if they like, or return them within a specific period if they do not. Such goods are said to have been sent 'on Jangad'. If these types of transactions happen often, a separate book is kept to record them, known as Jangad Nondh. When goods are sent to a customer on Jangad terms, or if the customer returns the Jangad goods, they are entered in the Jangad Nondh. If the customer decides to keep the Jangad goods, then its entry is removed from the Jangad Nondh and entered into the Udhar Nondh because this transaction then counts as a credit sale. Thus, until the customer confirms buying such goods, or the time limit for the Jangad sale expires, it cannot be considered an actual sale.

Exam Tip: Jangad Nondh is essential for accounting for goods sent on a "sale or return" basis, ensuring sales are recognized only after the customer's acceptance or the expiry of the trial period.

 

Question 3.14. Explain Karar Nondh.
Answer: Sometimes, large business houses make contracts with specific terms for purchasing or selling goods. The details of these types of agreements are entered in a book known as Karar Nondh. This book acts as a record of all contractual obligations.

Exam Tip: Karar Nondh serves as a contract register, an important record for businesses that frequently engage in agreements with special conditions for buying or selling goods.

Write Short Notes

 

Question 1. Rojmel.
Answer: Rojmel is the fundamental or primary book of accounting under the Deshi Nama System. It is written and prepared daily, and the closing cash balance is determined each day, hence it is known as Rojmel. Both cash and credit transactions are recorded in Rojmel. Additionally, the day's cash balance, termed 'Purant Baki', is calculated based on these recorded transactions. For firms with numerous daily transactions, big traders maintain Rojmel. Rojmel resembles a journal in the Double Entry System of accounting. The Rojmel book features blank pages with eight folds, where the first four folds on the left are for Jama (credit) entries, and the other four folds are for Udhar (debit) entries. Rojmel combines features of a journal and a separate cashbook from the Double Entry System. Therefore, under Deshi Nama, there is no need to open a separate cashbook or cash account. The ledger is prepared with the help of Rojmel entries.

Exam Tip: Rojmel is the central daily record in Deshi Nama, integrating journal entries and cash transactions. Its daily balancing and dual-sided format are key features.

 

Question 2. Bethomel.
Answer: Bethomel signifies a composite Rojmel for a specific, fixed period. It is another form of Rojmel, prepared weekly, fortnightly, or monthly. Small traders, whose volume of business transactions is relatively low, may keep a Bethomel instead of a Rojmel. At the completion of each transaction, its Tithi (Date) is recorded. The Balance (Silak) is determined at the end of the period for which the Bethomel is prepared. Bethomel is also called Thammel. Bethomel is also organized like Rojmel in a vertical book, with pages having eight folds. In Bethomel, when recording each transaction, besides the affected account, the Tithi of the transaction is written after Jama or Udhar. The closing balance (Silak) in Bethomel is found out in the same way as in Rojmel.

Exam Tip: Bethomel is a periodic journal and cash book, a variation of Rojmel, which is more suited for small traders with fewer transactions due to its less frequent balancing.

 

Question 3. Extracting Baki of Khata.
Answer: To know the status of a specific Khata (Account) on a particular day, the Baki (Balance) is calculated. The difference between the total amounts on the two sides of a Khata is called a Baki (Balance). In other words, Baki is the difference between the total debits (Udhar) and the total credits (Jama) of an account. To arrive at a balance, first, the total of amounts on the Jama side is done and written in the third fold on the Jama side. Similarly, the total of the amount on the Udhar side is written in the third fold on the Udhar side. The difference between these two totals is then found, which is known as 'Baki'. The 'Baki' of a 'Khata' is recorded on the side where the total of amounts is less. The side with the greater total is considered as that balance. For instance, if the Jama side's total is more, the balance is called 'Jama Baki', and if the Udhar side's total is more, the balance is called 'Udhar Baki'. When the Jama side's total of the Khata (Account) is more, the difference amount (Balance or baki) is written on the Udhar side. If accounts are Paka, 'Baki Deva' is noted in the specific column. Conversely, if the Udhar side's total of the Khata (Account) is more, the difference (Balance or Baki) is written on the Jama side. If accounts are Paka, 'Baki Lena' is written in the particulars column. After recording the balance (Baki) of an account, a line is drawn beneath it, and the total of the opposite side is written. Below the total on both the Jama and Udhar sides, two lines are drawn. When both sides of an account have the same total, it is said to be 'Khatu Sarbhar thayu'. 'Shri Sarbhar Khatu' is written against the total amount, which is Sarbhar Khata.

Exam Tip: Extracting Baki of Khata is the process of balancing ledger accounts, where the difference between debits and credits determines the account's balance (Baki), crucial for preparing financial statements.

 

Question 3. What is Havala?
Answer: To determine a business's profit or loss, Kacha Khata must be closed, and accounting effects for various items must be applied to find the true profit or loss. These items include closing stock, unpaid expenses, depreciation, bad debts, error rectification, prepaid expenses, outstanding income, and pre-received income. Additionally, the Ghar-Kharch Khatu is closed at the year's end and moved to Bhandol Khate, and any profit or loss is transferred to Bhandol Khate. All these effects require entries, and the process of passing these entries is known as Havala.

Exam Tip: Havala refers to all the adjustment entries made at the end of the accounting period to ensure that all revenues and expenses are recognized in the correct period and assets and liabilities are accurately stated.

 

Question 4. What is Utaro?
Answer: In the Double Entry System, a trial balance is prepared before creating final accounts to check for any arithmetic errors. Similarly, Utaro is prepared in Deshi Nama. Utaro is created based on the balances of Paka Khata and the total debit and credit sides of Kacha Khata. Generally, Utaro is prepared on the last page of the Khatavahi. It has two sides, Udhar and Jama. On both sides, the first column is for the amount, and the remaining columns are for account details. In the Utaro, the credit balance (Baki Deva) of Paka Khata is recorded on the Jama side, and the debit balance (Baki Lena) of Paka Khata is recorded on the Udhar side. Without finding the balance of Kacha Khata, the difference between the total of the debit and credit sides of Kacha Khata is recorded in the Utaro. If the total of the credit side is greater, it is a credit balance and is recorded on the Jama side of the Utaro. If the total of the debit side is greater, it is a debit balance and is recorded on the Udhar side of the Utaro. This way, the balances of Khata and the difference in amounts are shown in the Utaro. The closing balance, as per Rojmel or Bethomel, is then recorded on the Udhar side or the Jama side of the Utaro. If the total of the Udhar side, including the cash balance, equals the total of the Jama side, then it is said that the Utaro has tallied.

Exam Tip: Utaro serves as a crucial summary statement in Deshi Nama, comparable to a trial balance, used to verify the arithmetical accuracy of ledger accounts and consolidate balances from both permanent and temporary accounts.

 

Question 5. Explain Kacha and Paka Khata.
Answer:
1. Kacha Khata: These accounts are closed at the financial year's end to determine the business's outcome. Accounts related to buying and selling goods, as well as incomes and costs, are known as Kacha Khata. They are closed each year and moved to Kharid-Vakra Khate or Vatav Khate. The business's profit or loss is revealed through Kacha Khata. Havala Nondh is used to close these accounts. Examples include Shri Vakara Khatu, Shri Pagar Khatu, Shri Vyaj Khatu, and Shri Dalali Malel (Received) Khatu.
In simple words: Kacha Khata are temporary accounts that we close at the end of the year to see if the business made money or lost money. They show all the buying, selling, income, and expenses for that year.
2. Paka Khata: Paka Khata refers to accounts that remain open at the close of the accounting period, with their balances transferred to the subsequent year in the new Ledger (Khatavahi). These include personal accounts for people and asset accounts. The balances of Paka Khata are presented in the Balance Sheet (Sarvaiya). Businesses can understand their financial situation using Paka Khata. Since Paka Khata are not closed, no Havala Nondh entries are made for them.
In simple words: Paka Khata are permanent accounts that stay open year after year. They show what a business owns, owes, and who it deals with. They help us understand the business's overall money situation.

Exam Tip: Clearly differentiate Kacha Khata as temporary accounts closed annually for profit/loss calculation and Paka Khata as permanent accounts carried forward for financial position reporting.

 

Question 4. Answer following questions as asked:

 

Question 4.1. Write short note on: Sama Daskatni Khatavahi
Answer: Usually, money lenders and bankers in the money lending business keep this specific kind of Khatavahi. Here, a ledger account is opened for each client who takes out a loan. This account includes the loaned amount, date, interest rate, payment plan details, penalties for late payments, and any assets or papers held as security. To verify the loan amount, a revenue stamp is placed, and the borrower's signature is acquired. Because it holds the signature of the person who borrowed the funds, it is called Sama Daskatni Khatavahi.
In simple words: Sama Daskatni Khatavahi is a special account book used by money lenders. It tracks all loan details for each customer, like the amount, interest, and payment dates. It also records what was kept as security and needs the borrower's signature as proof.

Exam Tip: When explaining Sama Daskatni Khatavahi, focus on its role in money lending, emphasizing the recording of loan details, collateral, and the significance of the borrower's signature as proof.

 

Question 4.2. Explain, how the transactions of goods return are recorded in Deshi Nama System.
Answer: In the Deshi Nama System, traders typically do not maintain a separate subsidiary book for recording goods return transactions. Instead, the accounting effects of these returns are entered in the Udhar Nondh and Jama Nondh. Cash-related purchase returns or sales returns are recorded in the Rojmel or Bethomel. Credit sales returns and credit purchase returns are recorded as explained below:
1. Credit sales return transactions:

• When products sold are returned before the sale is formally recorded, the value of the return is subtracted from the invoice, and only the net sale amount is entered in the Udhar Nondh.
• If products sold are returned after the credit sale has been noted in the Udhar Nondh but before preparing the Tarija, the return amount is deducted from the credit sales, and just the net amount is entered in the Udhar Nondh.
• If products sold are returned after the Tarija has been prepared, the sales return is handled as a credit purchase and recorded in the Jama Nondh.

2. Credit purchase return transactions:

• If products purchased are returned before the purchase has been recorded, the value of the return is subtracted from the invoice, and the net purchase amount is entered in the Jama Nondh.
• If products purchased are returned after the credit purchase has been noted in the Jama Nondh but before preparing Tarija, the amount of the return is subtracted from the credit purchase, and only the net amount is entered in the Jama Nondh.
• If products purchased are returned after preparing Tarija, the purchase return is treated as a credit sale and recorded in the Udhar Nondh.

In simple words: In Deshi Nama, we usually don't have a special book for returned goods. We record returns in the Udhar Nondh and Jama Nondh. Cash returns go into Rojmel or Bethomel. For credit sales returns, if goods come back before the sale is recorded, we adjust the bill in Udhar Nondh. If they come back after recording but before Tarija, we still adjust in Udhar Nondh. If they return after Tarija, it's treated like a credit purchase and recorded in Jama Nondh. For credit purchase returns, if goods go back before purchase is recorded, we reduce the bill amount in Jama Nondh. If after recording but before Tarija, we still reduce in Jama Nondh. If after Tarija, it's seen as a credit sale and goes into Udhar Nondh.

Exam Tip: Clearly distinguish between sales returns and purchase returns, noting how each affects the Udhar Nondh or Jama Nondh, and when Rojmel or Bethomel are used.

 

Question 4.3. Write detailed notes on Havalamel.
Answer: Entries must be made to apply the accounting impacts of Havala and to close Kacha Khata, transferring them to other accounts (such as Kharid-Vakra Khate). The statement prepared with this aim is known as Havalamel. Many business owners create the Havalamel on the final page of the Rojmel or Bethomel. Havalamel is also called Achadmel, Mand-Chhod no Mel, or Jama-Kharchi Mel. In the Havalamel, Kacha Khata are closed, and adjustments such as closing stock, unpaid expenses, advance payments, incoming income, advance receipts, asset depreciation, unrecoverable debts, interest on capital, and error corrections are applied, similar to the Rojmel. When recording these impacts in the Havalamel, the account to be credited is placed on the Jama side, and the account to be debited is placed on the Udhar side. After this, the postings are made to their correct accounts. Finally, any profit or loss from the Kharid-Vakra Khata is either credited or debited to the Bhandol Khate. Both sides of the Havalamel must always sum to the same total.
In simple words: Havalamel is a special account sheet made at the end of the accounting period, usually on the last page of Rojmel. It's used to finalize Kacha Khata and record year-end adjustments like closing stock, expenses, income, and depreciation. It helps move profits or losses to the Bhandol Khate, ensuring both sides always match.

Exam Tip: For Havalamel, remember its purpose is to close temporary accounts and make year-end adjustments, ensuring all financial effects are properly recorded before final statements.

 

Question 4.4. How the Sarvaiyu is prepared in Deshi Nama?
Answer: Once all Havala entries are completed, the Paka Khata (accounts for individuals and assets) and the ending cash balance (Shree Purant Baki) are presented in a Jama-Udhar statement. This statement shows the business's financial health and is known as Sarvaiyun. The Sarvaiyun's layout resembles a Utaro, with the initial four folds dedicated to the Jama side and the final four folds to the Udhar side. On the Jama side, the Jama Baki of Paka Khata (meaning 'to be paid') are noted, and on the Udhar side, the Udhar Baki (meaning 'to be received') are recorded. For both sides, the first column displays the amount, while the next three columns show the account's name and L.E. The Jama side begins with the Bhandol Khata balance. In this manner, balances are recorded on both sides, and their totals are written. Following this, the 'Shri Purant Baki' amount is placed on the Udhar side. Finally, the total for both the Jama and Udhar sides should match.
In simple words: Sarvaiyun is like a financial report created after all year-end adjustments (Havala). It lists permanent accounts, individual accounts, and the final cash balance. It tells you the company's financial standing and looks a lot like a Utaro, with sections for Jama and Udhar. In the Sarvaiyun, what needs to be paid goes on the Jama side and what needs to be received goes on the Udhar side. It's set up like a balance sheet, listing account names and amounts. The total on both sides must always be equal.

Exam Tip: Understand that Sarvaiyun provides a snapshot of the business's financial position at a specific time, similar to a balance sheet.

 

Question 5. How will you record the following items in Havalamel?
(i) Akharmal stock Rs 15,000
(ii) Vyaj Malvanu Baki Rs 3,500
(iii) Agauthi Chukvel Vimo Rs 700
Answer:
H.M.P. No
Havalamel of...

In simple words: The Havalamel shows how different year-end adjustments are recorded. For Akharmal stock, it's debited to the stock account and credited to Kharid-Vakra Khate. For outstanding interest (Vyaj Malvanu Baki), it's debited to the interest account and credited to the outstanding interest payable account. For prepaid insurance (Agauthi Chukvel Vimo), it's debited to the prepaid insurance account and credited to the insurance expense account. These entries ensure that all assets, liabilities, incomes, and expenses are properly updated before finalizing accounts.

Exam Tip: When preparing Havalamel entries, remember that stock adjustments typically involve Kharid-Vakra Khate, while prepaid and outstanding items adjust their respective expense/income accounts.

 

Question 5.1. State characteristics of Deshi Nama.
Answer: From an accounting principle perspective, the Deshi Nama System resembles the Double Entry System of bookkeeping. However, it features specific attributes that distinguish it as a distinct accounting method. It is also referred to as Vahi-Khata Paddhati.
Some key characteristics include:

• 1. Books of accounts: Deshi Nama books are vertical, feature plain white paper, are bound with a string in the middle, and have red cloth covers.
• 2. Vikram Samvat: Deshi Nama records typically follow the Vikram Samvat calendar, from Kartak Mas to Aso Mas.
• 3. Sides: In Deshi Nama books like Rojmel or Bethomel and Khatavahi, the right side represents debit entries, and the left side represents credit entries.
• 4. Use of 'Shree' or 'Shri': The term 'Shree' or 'Shri' is placed before every account name in Deshi Nama.
• 5. Amount: In Rojmel and Khatavahi, the financial amount is written first, followed by its descriptive details on the side.
• 6. Olayo or Holayo: When writing amounts, the 'J' symbol is used between rupees and paise, and this mark is known as 'Holayo' or 'Olayo'.
• 7. Sal (folds): Pages in these accounting books come with 'sal' (folds). Rojmel, Bethomel, and Khatavahi usually have eight folds, while Subsidiary Books have six. Modern practice, however, often uses pages without folds.
• 8. Specific word usage: In Deshi Nama, capital is referred to as Bhandol, drawings as Ghar-Kharch, furniture as Sadhan-Saranjam, sales as Vakra, opening cash balance as Purant Janse, and closing cash balance as Purant Baki.
• 9. Particulars in the ledger: Ledger accounts in Deshi Nama include the transaction amount, Rojmel page number, and the transaction date (Tithi).
• 10. Posting: Entries from Rojmel or Bethomel are posted to the corresponding side of the ledger.
• 11. Language: Deshi Nama is recorded in the local regional language.
• 12. Ink: Traditionally, Deshi Nama is written using black ink, although blue ink is now also used.

In simple words: Deshi Nama is an accounting system similar to double-entry but with distinct features. Its books are vertical, use the Vikram Samvat calendar, and have specific terms for accounts. It also uses a unique 'J' sign for amounts and is typically written in the regional language with black or blue ink.

Exam Tip: When describing Deshi Nama characteristics, emphasize its unique aspects like traditional binding, regional calendar use, and specific terminology, as these differentiate it from modern accounting systems.

 

Question 5.2. State types of Khatavahi as per Deshi Nama System and explain each of them.
Answer: The book of accounts where individual accounts related to assets, goods, income, and expenses are set up is known as Khatavahi. It serves as one of the primary records.
Khatavahis are categorized into the following types:

• 1. Saadi Khatavahi
• 2. Bethi Khatavahi or Tham Khatavahi
• 3. Sama Daskatni Khatavahi

Let's explain each type:
1. Saadi Khatavahi: In this Khatavahi, all the business accounts or Khatas are maintained, making it known as Saadi Khatavahi. From an accounting perspective, this book holds great importance. It helps obtain all necessary information related to people, goods, assets, incomes, and expenses at the end of each year. From this, a Trial balance (Utaro) and Annual accounts (Varshik Hisabo) can be prepared.
In simple words: Saadi Khatavahi is a comprehensive account book where all business accounts are kept. It's crucial for gathering yearly financial information and preparing financial statements.
2. Bethi Khatavahi or Tham Khatavahi: Many business people show the entire transaction within the account when making entries, which quickly reveals receivables and payables. This type of account is called Betha Khata, and the associated Khatavahi is known as Bethi Khatavahi or Tham Khatavahi. Typically, if the Udhar Nondh and Jama Nondh are not prepared in that business, then both types of Khatavahi are maintained. A simple entry for credit sales and credit purchases is made here. When funds are received for credit sales or paid for credit purchases, the relevant account in Bethi Khatavahi is closed, and the entry is recorded in the Rojmel. This Khatavahi is not typically useful for preparing yearly accounts and has no specific use beyond its primary function.
In simple words: Bethi Khatavahi is a simpler account book where businesses directly record transactions to easily track who owes them and what they owe. It's used when Udhar Nondh and Jama Nondh aren't kept, but it's not used for full yearly financial reports.
3. Sama Daskatni Khatavahi: Generally, money lenders and bankers in the money lending business maintain this kind of Khatavahi. In this book, a ledger account is opened for each customer who has borrowed money. It records the amount loaned, date, day, interest rate, details of installments, penalties for late payments, and any mortgaged assets or documents. As proof of the amount loaned, a revenue stamp is affixed, and the borrower's signature is obtained. Since it carries the signature of the person who borrowed the funds, it is known as Sama Daskatni Khatavahi.
In simple words: Sama Daskatni Khatavahi is a special ledger used by money lenders for each customer who takes a loan. It details the loan amount, interest, payment terms, and any security, requiring the borrower's signature for proof.

Exam Tip: When explaining types of Khatavahi, remember to highlight the distinct purpose of each – Saadi for comprehensive accounting, Bethi for quick receivable/payable tracking, and Sama Daskatni for loan records with borrower signatures.

 

Question 5.3. Explain different Peta Nondh kept under Deshi Nama System.
Answer: Under the Deshi Nama System, various Peta Nondh (subsidiary books) are maintained for distinct purposes:

• Jama Nondh (Kharid Nondh)
• Udhar Nondh (Vechan Nondh or Vakra Nondh)
• Daginamel (Janasvahi or Stock Register)
• Aankadavahi (Sudhavahi or Kachi Khatavahi)
• Ugharani Nondh (Collection Book)
• Jangad Nondh
• Karar Nondh (Contract Book)
• Vyajvahi
• Hundivahi
• Kabalavahi
• Bank Register (Bankvahi)

Explanation:

• Jama Nondh (Kharid Nondh): This book records all transactions involving the credit purchases of goods.

In simple words: Jama Nondh is where businesses keep track of goods they buy on credit.

• Udhar Nondh (Vechan Nondh or Vakra Nondh): This book records all transactions involving the credit sales of goods.

In simple words: Udhar Nondh keeps track of all goods sold on credit.

• Daginamel (Janasvahi or Stock Register): This book records the incoming and outgoing transactions of goods, acting as a stock register.

In simple words: Daginamel is a stock book that records all goods coming in and going out.

• Aankadavahi (Sudhavahi or Kachi Khatavahi): Aankadavahi functions as a Kachi Khatavahi, helping to manage accounts.

In simple words: Aankadavahi is a preliminary account book, or a Kachi Khatavahi.

• Ugharani Nondh (Collection Book): This book is prepared specifically for the purpose of collecting amounts due from debtors.

In simple words: Ugharani Nondh is a book used to keep track of money that needs to be collected from customers.

• Jangad Nondh: This book records the Jangad sale transactions of the business.

In simple words: Jangad Nondh tracks sales where goods are sent out on a trial basis or approval.

• Karar Nondh (Contract Book): Businesses often enter into numerous contracts concerning purchases, sales, or other matters. Karar Nondh is prepared to maintain a record of these contracts.

In simple words: Karar Nondh is a contract book that stores all details of purchase, sale, and other business agreements.

• Vyajvahi: Generally, moneylenders and shroffs maintain this book to record interest-related transactions.

In simple words: Vyajvahi is a record book kept by moneylenders to track interest transactions.

• Hundivahi: When businessmen engage in many bill transactions, they maintain a separate book called 'Hundivahi' to record such information.

In simple words: Hundivahi is a special book where businessmen record all their bill-related transactions.

• Kabalavahi: This book is maintained by businessmen involved in 'Forward Trading' to record the details of their forward transactions. It is known as 'Kabalavahi'.

In simple words: Kabalavahi is a book for forward trading, recording all the details of future transactions.

• Bank Register (Bankvahi): This book records all transactions conducted with the bank.

In simple words: The Bank Register is where all banking activities and transactions are recorded.

Exam Tip: For each Peta Nondh, be able to briefly state its primary function and what kind of transactions it records.

 

Question 5.4. What is Utaro? How is it prepared?
Answer: In the Double Entry System, a trial balance is prepared before the final accounts to check for any arithmetic inaccuracies. Similarly, in Deshi Nama, a Utaro is prepared. The Utaro is created using the balances (baki) of Paka Khata and the combined debit and credit totals of Kacha Khata. Generally, the Utaro is made on the final page of the Khatavahi. It features two sides: Udhar (debit) and Jama (credit). On both sides, the initial column is for the amount, and the remaining columns provide account details. In the Utaro, credit balances (Baki Deva) from Paka Khata are recorded on the Jama side, and debit balances (Baki Lena) from Paka Khata are recorded on the Udhar side. Without calculating the Kacha Khata balance, the difference between the total debit and credit sides of Kacha Khata is entered in the Utaro. If the total of the credit side is greater, it indicates a credit balance, which is recorded on the Jama side of the Utaro, and if the total of the debit side is greater, then it shows a debit balance, which is recorded on the Udhar side of the Utaro. This way, the balances of Khata and the differences in amounts are presented in the Utaro. Subsequently, the closing balance, as recorded in Rojmel or Bethomel, is entered on either the Udhar side or the Jama side of the Utaro. If the total of the Udhar side, including the cash balance, matches the total of the Jama side, then the Utaro is considered to have balanced.
In simple words: Utaro is like a trial balance in Deshi Nama, used to check for math errors before making final accounts. It uses balances from permanent accounts (Paka Khata) and totals from temporary accounts (Kacha Khata). It's typically on the last page of the ledger, showing debits and credits. The credit balances go on the Jama side, and debit balances go on the Udhar side to ensure accuracy. The Utaro ensures all account balances and cash balance match, confirming the arithmetic is correct.

Exam Tip: Recognize that the Utaro ensures the arithmetical accuracy of ledger accounts before final financial statements are prepared, much like a trial balance in modern accounting.

 

Question 5.5. Explain in brief the methods of calculating profit-loss under Deshi Nama System.
Answer: The Deshi Nama System uses two main approaches to determine profit or loss:
1. Kharid-Vakra Khata system: Under this method, traders maintain a combined Kharid-Vakra Khatu. Purchases (Kharid) are recorded on the Udhar (debit) side, and sales (Vakra) are recorded on the Jama (credit) side. First, the opening stock of goods is transferred to the Kharid-Vakra Khate. Then, adjustments for closing stock, incomes, expenses, bad debts, depreciation, and error corrections are made. Following this, all Kacha Khata are transferred to and closed in the Kharid-Vakra Khate. After summing both sides of the Kharid-Vakra Khatu, the difference is calculated. If the Jama side's total is greater, it indicates a profit; if the Udhar side's total is greater, it indicates a loss. The entry for moving this profit or loss to the Bhandol Khate is made in the Havalamel, and this record is posted to the Kharid-Vakra Khate, thereby closing the account.
In simple words: In the Kharid-Vakra Khata system, we use one account to track both purchases (debit side) and sales (credit side). After adding opening stock and making all necessary adjustments, we close all temporary accounts here. If the sales side is bigger, it's a profit; if the purchase side is bigger, it's a loss. This profit or loss is then moved to the Bhandol Khate.
2. Vatav Khata System: Typically, large traders or those who deal in multiple products prepare a Vatav Khatu to ascertain their profit or loss. This method requires preparing two accounts to determine profit or loss:
(i) Kharid-Vakra Khatu: In this account, adjustments (Havala) for stock are recorded, along with adjustments to close accounts related to purchase expenses and goods. Subsequently, the outcome of the Kharid-Vakra Khata is moved to the Vatav Khate. This means the profit or loss from the Kharid-Vakra Khata is transferred to the Vatav Khate.
(ii) Vatav-Khatu: After the Kharid-Vakra Khatu, adjustments for incomes, expenses, bad debts, error corrections, depreciation, and all Kacha Khata are closed by moving them to the Vatav Khata. The balance in this account shows the business's profit or loss, which is then transferred to the Bhandol Khate, and the Vatav Khatu is closed. If there is a profit, the Vatav Khatu is debited, and the Bhandol Khate is credited. If there is a loss, the Vatav Khatu is credited, and the Bhandol Khate is debited.
In simple words: The Vatav Khata system is used by bigger businesses, often for multiple products. It involves two steps: first, the Kharid-Vakra Khata collects all purchase-related profits or losses and passes them to the Vatav Khata. Second, the Vatav Khata itself handles all other income, expenses, and year-end adjustments to find the final profit or loss, which is then moved to the Bhandol Khate.

Exam Tip: Understand that the Vatav Khata System provides a more detailed breakdown of profit/loss by involving two separate accounts, especially useful for larger businesses or those with varied commodities.