Sundry Accounts

**CLIVE-TRIANGLE** · 13-Mar-13, 07:41 AM

Originally Posted by Simimano

Thanks for the info Mike C, But I am sitting with the total receipts in the sundry account and the total payments, I have a list of items I need to sort and decide which goes into the sundry, the rest..Well we might as well imagine that it doesn't exist. I have the amounts for both receipts and payments, they are quite high, In other words I have the end amounts but I don't know what needs to go in sundry to get there..Which is why I thought what I had mentioned in the first post would go in sundry, since they are groups not individual accounts?

Which is why..I am confused.

The safest route is to identify the trivial and non-recurring.
Trivial so that they do not affect overall perception of profitability, in other words their absence would not be missed, and their presence barely noticed.
Recurring expenses, unless really insignificant, almost are never sundry, because they imply a contractual commitment.

**Simimano** · 13-Mar-13, 09:05 AM

Definitely makes sense. So then trivial which is of very low importance and then non-recurring, probably won't happen again. So then there isn't much that really qualify for sundry, put that way, The basics I have listed, Can't really be done away with..since a business kinda needs electricity!

Most things imply contractual commitment, they are bound to be recurring.

**Elijah** · 13-Mar-13, 09:12 AM

HI Simimano

You will find that the word Sundry is used more loosely in exams and college course works and this can be quite confusing. I know when I was studying "sundry accounts came up quite often, but in the real world it is not used much, MIKE C has given some reasons for this. The larger the business the less likely they are to use "sundry accounts". Smaller businesses that need to spend more Company resources on actually making money, and will have more non-recurring transactions than larger businesses, so these smaller businesses will make more use of sundry accounts [cost/benefit principle], in larger corporations which have stricter internal control measures, such decisions would be made by the audit committee and not the accountant.

Just keep the difference between the 2 in mind and this should reduce the confusion.

**CLIVE-TRIANGLE** · 13-Mar-13, 10:18 AM

Originally Posted by Simimano

Definitely makes sense. So then trivial which is of very low importance and then non-recurring, probably won't happen again. So then there isn't much that really qualify for sundry, put that way, The basics I have listed, Can't really be done away with..since a business kinda needs electricity!

Most things imply contractual commitment, they are bound to be recurring.

1) I should have been more clear. By recurring I mean the same amount at regular intervals.

2) Trivial or not material would mean, as I said, their absence or inclusion would have no effect on a person's perception of the business, and/or when individual identification similarly has no effect on a person's perception of the business.

So, it follows then that sundry is actually more about the other stuff than the sundry expenses themselves. For example a company engaging in drilling activities out in the field would have huge fuel and maintenance expenses. They might also have an office that uses electricity. That could would be regarded as sundry in the light of the other expenses, and because they are not a core function. Rent would never be regarded as sundry because their is a contractual liability related to it, no matter how trivial.

As already pointed out by another poster, sundries have a way of accumulating and accountants often are required to analyse it.

**Simimano** · 13-Mar-13, 11:18 AM

Thanks a lot for the information above.

From just the short explanation that had been provided with my study material was simply not helpful since it had the definition for sundry but that is it.

I was wondering, Say a capital contribution is made by the owner of the business, He contributes R120 000, It is once off, yet quite a large amount of money, This is not a contractual commitment, So in other words it will be considered as sundry? It would probably make a dent in their capital though if the contribution was not made, but the owner could have decided not to, and the business would not have the extra R120 000, Which means in the first place the business would not have sunk if the R120 000 was not contributed. So it could be done away with?

It would explain the amount in sundries, but I could just be getting ahead of myself.

**CLIVE-TRIANGLE** · 13-Mar-13, 11:39 AM

No. Never. Ever.

A R1. movement in capital is disclosable and is never sundry.
Try faxing this question to me at 086 512 9974 and I will guide you. Or else send it to me with a private message.

**Simimano** · 13-Mar-13, 01:31 PM

Sigh..

Its not that hard..I don't understand why I cannot succeed.
Furthermore, I will see what I can accomplish on my own, Though I will PM you if I cannot come right.

**Elijah** · 13-Mar-13, 02:36 PM

The adjective "sundry" is used with expenses. Expenses are nominal accounts that is to say the will only last for the Financial period in question at the end of the financial period, closing journals are carried out. What the closing journals clear-out all nominal accounts for the year, so that at the beginning of the following financial period, they all have zero balances. Real accounts on the other hand are never "cleared-out" but their balances carry forward perpetually, because they are more "important" then nominal accounts. The Capital account is a real account, this is a different class of accounts to expenses, so like Clive-Triangle mentioned even R1 Is not insignificant.

Dont worry, it's going to take time for you to see the "whole puzzle" then it will all make sense, thats just how Accounting works, almost everything is inter-related, one big web. When you study GAAP or IFRS then everything will make sense. You dont sound like a quitter, so GOOD LUCK

Accounting can be as diverse as the Business environment it serves.

**Simimano** · 13-Mar-13, 04:14 PM

How could I forget..Its a Capital account which means it has nothing to do with sundry..

Did you study GAAP and/or IFRS? Yes, it would appear to be one big puzzle! That I am yet to complete..Understand and master!
Thanks for the Good luck, I will need it!