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Q.

What is mercantile accounting system ? Do we follow the system in India?

Asked by joyesh chakraborty, 02 Jul '08 01:09 pm
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Answers (13)

1.

There is no single fefinition of Mercantilism. However if you club together following ideas, then, what you arrive at, may be called mercantilism.

(1) Bullionism was the belief that the economic health of a nation could be measured by the amount of precious metal, gold, or silver, which it possessed. The rise of a money economy, the stimulation produced by the influx of bullion from America, the fact that taxes were collected in money, all seemed to support the view that hard money was the source of prosperity, prestige, and strength.

(2) Bullionism dictated a favorable balance of trade. That is, for a nation to have gold on hand at he end oft he year, it must export more than it imports. Exports were later defined to include money spent on freight, or insurance, or travel.

(3) Each nation tried to achieve economic self-sufficiency. Those who founded new industries should be rewarded by the state.

(4) Thriving agriculture should be carefully encouraged. Domestic production ...more
Answered by Jack Johnson, 02 Jul '08 06:15 pm

 
  
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2.

Dear Joyeshji, I have no idea so I am unable to comment on the same. Regards Cyrus
Answered by cyrus irani, 02 Jul '08 03:30 pm

 
  
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3.

No chartered accountant I am but have a little idea about it. It is very easy to understand and simple to explain. A mercentile system is one, in which the accounting is done only on actual accruals, meaning when it happens. Here, if we owe some one something on account for purchases or any other matter, it is taken into consideration into the account books only at the time of actual payment. Similarly, what is owed to us, we would take into account only when it is actually recieved.

The difference with this system of accounting with what we follow in companies are in that, a book entry for all receivables and payments are made in the book of accounts. To explain it, suppose I have got a stock worh 5 lacs, and I have a credit period of 2 months, I would still make an entry to this effect in my account books and show the party as a sundry creditor. Similary, if I have given a service or goods, I will show that payment due as a Sundry Debitor the moment the Invoice is raised. In short ...more
Answered by Omega, 02 Jul '08 07:27 pm

 
  
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4.

Mercantile system of accounting is that system of
accounting where amount paid or payable,received or
receivable accounted.It is also known as Accrual accounting.
Presently every company is following that.
its followed or not in india i dont know about it
Answered by Stone Heart, 02 Jul '08 03:47 pm

 
  
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5.

Mercantile accounting system is refer to manage the accouting system in better way regard managing the mercantile law systme in accurate way with the accuracy of corrective way in maintenance of mercantile rules and regulations for helpful of businesses and organizations
Answered by USHA YARNS LTD, 29 Nov '12 06:19 pm

 
  
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6.

It is the accrual basis of accounting.
Answered by nargis bhambi, 02 Jul '08 11:13 pm

 
  
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7.

There r 2 types of system of accounting- cash sys n mercantile sys...mercantile system of accounting is followed by almost all the organisations in india...
in dis system of accounting, expenses or incomes r recognised or accounted as and when they are incurred or earned and nt wen they are are received or paid...for eg, u hav tu pay rent fr the month of january..den irrespective of u pay the rent or not the amt of rent to b paid is accounted fr the month of jan...
where as in cash system of accounting, exps or incomes r acoounted fr only wen they r paid or received..taking tha above eg. intu consideration,if u follow cash sys, den the amt of rent fr jan wll b accounted fr only wen it is paid by u...
mercantile sys wll reduce the tax burden of company tu certain extent coz since all exps fr particular accounting period r accounted fr, it reduces the taxable income of company....
Answered by guru kiran, 02 Jul '08 10:13 pm

 
  
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8.

Mecantile accouting is simply the accounting system followed in business world of india in double entry technique. copany law recommends this system
Answered by HARIJIBAN BANERJEE, 02 Jul '08 04:31 pm

 
  
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9.

Mercantilism is an economic theory that the prosperity of a nation depends upon its capital, and that the volume of the world economy and international trade is unchangeable. Government economic policy based on these ideas is also sometimes called mercantilism, but is more properly known as the mercantile system. Some scholars conceive the mercantile system as a subset of, or synonymous with, the early stages of capitalism, while others consider mercantilism to be a distinct economic system.
Answered by Sin Citi, 02 Jul '08 04:08 pm

 
  
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10.

We in India practice double entry book keeping system: Mercantile system of accounting cannot be considered a mere mathematical model where subjective conclusions on realisability or otherwise of an income have no place.
This aspect in particular plays a very important role in Banking Industry with reagrd to NPA concept. Where a Non performing asset is not considered as NPA with the contention that it is going to be rectified within that financial year. Hence I can say the NPA let shown by Banks is bogus as the bad debt is actually no recovered.
Answered by jameel ahmed, 02 Jul '08 04:00 pm

 
  
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