Prof. Pratik Gohil

  📘 Aarav’s Journey into the World of Investments Aarav was a 25-year-old software engineer who had just received his first big annual bonus. Until then, most of his earnings were either spent on lifestyle expenses or kept idle in his savings account. While talking with his father one evening, Aarav realized that simply keeping money in the bank would not help him achieve his long-term dreams—buying a house, starting his own business, and eventually retiring early. He wanted his money to grow, but he was unsure how to begin. That weekend, Aarav met his friend Meera, who worked as a financial advisor. Seeing his curiosity, she decided to guide him through the basics of investments and financial planning . 🌟 Introduction to Investments Meera started with a simple question: “What do you think investment means?” Aarav replied, “Maybe saving money in a bank account?” Smiling, Meera explained, “Not exactly. Investment is about putting your money to work so it grows over time. Un...

  📘 Story: Riya’s Café and the Power of Financial Planning Riya always dreamed of opening a café in her town. She had the recipes, the passion, and the support of her family. But when she sat down to actually start, she realized passion alone could not run a business—she needed a budget and a clear financial plan. 🌟 Introduction to Budgeting One evening, her mentor told her: “Riya, budgeting is like a map. Without it, you don’t know where your money is coming from or going to. With it, you can plan expenses, track revenues, and achieve stability.” Riya understood that the purpose of budgeting was not only to record numbers but also to: Control spending Reduce financial stress Allocate resources wisely Improve decision-making Set benchmarks for success She smiled and thought: “Budgeting is like the recipe card for money—it guides every ingredient I put into my business.” 📝 Different Types of Budgets As she researched, she found that busines...

  📖 The Story of Sutra Café: Understanding Financial Statements Ravi, Meera, and Arjun had always dreamt of running a small business together. After finishing their studies, they decided to open a cozy little café near their college campus. They named it Sutra Café , believing that it would weave together their passion for coffee, friendship, and entrepreneurship. In the very first month, their café was buzzing with customers—students, professors, and office-goers all loved their coffee and snacks. By the end of the month, the friends were excited to know whether they had really made money or not. But how could they be sure? Their mentor, Professor Shah , smiled and said, “Every business speaks the language of financial statements. If you learn to read this language, you’ll always know the true story of your café.” Income Statement – The Story of Profitability Professor Shah first taught them about the Income Statement , also called the Profit and Loss Statement . This...

Aarav, a young entrepreneur, always dreamed of owning a coffee shop. He was confident about his coffee making skills, but soon realized that turning this dream into reality required more than passion, it required finance. Finance, he learned, is the art and science of managing money: planning, raising, investing, and controlling financial resources to achieve business goals. When starting his venture, Aarav explored various types of business structures. He considered a sole proprietorship for its simplicity and control but noted the drawback of unlimited personal liability. Partnerships offered shared responsibility and resources but also shared risks. A private limited company, though more regulated, provided limited liability and made it easier to raise funds. Aarav decided to register his café as a private limited company, keeping future expansion in mind. Very quickly, he discovered that finance is the lifeblood of any business. It is needed before operations begin, to purchase...

Canon of Taxation By canons of taxation, we simply mean the characteristics or qualities which a good tax system should possess. It refers to the guiding rules and principle to make tax collection system effective and functional. In fact, canons of taxation are related to the administrative part of a tax as it is related to the rate, amount, method and collection of a tax. Canons of Taxation are broadly classified into two heads as: A) Adam Smith’s canons of taxation B) Additional canons of Taxation A) Adam Smith’s canons of taxation: In his famous book ‘Wealth of Nation’, Adam Smith presented 4 canons of taxation which are also commonly referred to as the Main Canons of Taxation. They are as follows: 1)   Canon of equality or equity: By equality is meant equality of sacrifice. Accordingly, Canon of equality states t that the burden of taxation must be distributed equally or equitably in relation to the ability of the tax payers Hence, to ensure canons of equality, taxes ...

Introduction to Income Tax Act, 1961 Introduction: Tax is a payment made by individual and organization to the government. Government needs money for financing of defense, development such as construction of roads, dams, power projects, railways, health services etc.. Funds for all these requirements are collected by way of taxes. Taxes are the major source of revenue of any state. The role of the government is not just to maintain law and order but also to provide the above to the citizens. In India all the taxes are divided into two parts i.e. Direct & Indirect Tax. Wealth Tax, Income Tax, Gift Tax, Corporate Tax are included in direct taxes. Service Tax, Central Excise, Custom duty, Sales Tax, VAT are the indirect taxes. In the year 2017 GST has replaced all these indirect taxes. Out of the above taxes excluding VAT all the taxes are collected by central government. VAT is an important source of income in the hands of state government. Structure of Taxation in India: 1. ...

 Allocation, Apportionment and Reapportionment of Overheads           The objective of Cost Accounting is classifying costs and recording an appropriate allocation of expenditure for the determination of the costs of products or services, and for the presentation of suitably arranged data for the purpose of control and guidance of management A) Allocation of Overheads When items of cost are identifiable directly with some products or departments such costs are charged to cost centres. This process is known as cost allocation. It is the charging of discrete, identifiable items of cost to cost centres or cost units.  It is complete distribution of an item of overhead to the departments or products on logical or equitable basis is called allocation.  Where a cost can be clearly identified with a cost centre or cost unit, then it can be allocated to that particular cost centre or unit.  Allocation is the process by which cost items are charg...

Overheads                        Costs may be classified into direct of indirect cost:           Direct cost can be conveniently traced into or identified with the product manufactures. Direct costs which are also called “Prime Cost” or “Basic Cost which represent, the cost which can be easily and directly identified with the cost centers or cost units.  But indirect cost represents the costs which are not directly identifiable with the cost centers with the cost centers. These indirect cost are called "Overhead Expenses” Meaning: Overheads is the aggregate of indirect material cost, indirect labour cost and indirect expenses which cannot be conveniently identified with and directly allocated to a particular cost center or cost object in an economically feasible way. It is also known as indirect cost or burden or on cost.  Overheads = Indirect Material + Indirect Wa...