The document provides a trial balance for Mr. Manohar for the year ended 31 December 2010 along with adjustments. It asks to prepare the Trading, Profit and Loss account and Balance Sheet.
Key figures include purchases of Rs. 21,600, sales of Rs. 87,000, closing stock of Rs. 24,500. Adjustments include outstanding wages and salaries, prepaid insurance, reserve for bad debts, depreciation on furniture and machinery. The Trading and Profit and Loss accounts will show the gross profit and net profit figures. The Balance Sheet will present the assets, liabilities and capital with the net profit added to capital.
Notes on Valuation of Goodwill and Shares For BBA/B.com studentsYamini Kahaliya
the document contains Notes on Valuation of Goodwill and Shares
{Goodwill may be described as the aggregate of those intangible attributes of a business which contributes to its superior earning capacity over a normal return on investment}
{The share capital is the most important requirement of a business. It is divided into a ‘number of indivisible units of a fixed amount. These units are known as ‘shares’. }
Meaning
Purpose
Forms of presenting comparative statement
Comparative Balance Sheet
Advantage of comparative balance sheet
Format of comparative balance sheet
Illustration
Exercise
Comparative statements of profit & loss
Objective of comparative statement of profit & loss
Format of comparative statement of profit & loss
Illustration
Exercise
- An account records transactions relating to a particular item and their effect in terms of debits and credits. Debits increase accounts and credits decrease accounts.
- There are three types of accounts: personal, real, and nominal. Personal accounts relate to individuals, real accounts relate to assets and liabilities, and nominal accounts relate to income and expenses.
- Management accounting provides information to managers for planning, control, and decision making purposes, whereas financial accounting provides information to external parties. Management accounting focuses on the future and internal reporting.
Capital expenditure & Revenue expenditureMudassir Raza
Capital expenditures are typically one-time large purchases of fixed assets that will be used for revenue generation over a longer period. Revenue expenditures are the ongoing operating expenses, which are short-term expenses used to run the daily business operations.
This document discusses the reconciliation of cost accounts and financial accounts. When these two sets of accounts are maintained separately, the profits or losses reported may differ. A reconciliation statement is prepared to identify reasons for any differences. Common reasons for differences include items recorded in one set of accounts but not the other, different valuation methods for inventory, and over- or under-absorption of overhead costs. The reconciliation statement calculates the adjustments needed to make the profit/loss figures reported by the two sets of accounts agree.
The document discusses cost accounting and its evolution from a technique for ascertaining product costs to a technique for cost control and reduction. It defines cost accounting as recording, classifying, and summarizing costs to determine product costs, plan and control costs, and provide information for management decision making. Cost accounting is distinguished from financial accounting in that it focuses on internal cost analysis for management purposes, uses estimated data, and classifies costs as fixed and variable.
Ind AS 18 provides guidance on accounting for revenue. It aims to determine when to recognize revenue. Revenue is recognized when future economic benefits flow to the entity and can be reliably measured.
The standard addresses revenue recognition for sale of goods, rendering of services, and interest, royalties or dividends. For sale of goods, revenue is recognized when risks and rewards of ownership transfer. For services, revenue is recognized by reference to completion percentage. Interest is recognized using effective interest rate method, while royalties and dividends are recognized on an accrual basis.
The document also discusses concepts like deferred payment terms, non-cash transactions, and components of transactions. Disclosures required include revenue categories, accounting policies,
Notes on Valuation of Goodwill and Shares For BBA/B.com studentsYamini Kahaliya
the document contains Notes on Valuation of Goodwill and Shares
{Goodwill may be described as the aggregate of those intangible attributes of a business which contributes to its superior earning capacity over a normal return on investment}
{The share capital is the most important requirement of a business. It is divided into a ‘number of indivisible units of a fixed amount. These units are known as ‘shares’. }
Meaning
Purpose
Forms of presenting comparative statement
Comparative Balance Sheet
Advantage of comparative balance sheet
Format of comparative balance sheet
Illustration
Exercise
Comparative statements of profit & loss
Objective of comparative statement of profit & loss
Format of comparative statement of profit & loss
Illustration
Exercise
- An account records transactions relating to a particular item and their effect in terms of debits and credits. Debits increase accounts and credits decrease accounts.
- There are three types of accounts: personal, real, and nominal. Personal accounts relate to individuals, real accounts relate to assets and liabilities, and nominal accounts relate to income and expenses.
- Management accounting provides information to managers for planning, control, and decision making purposes, whereas financial accounting provides information to external parties. Management accounting focuses on the future and internal reporting.
Capital expenditure & Revenue expenditureMudassir Raza
Capital expenditures are typically one-time large purchases of fixed assets that will be used for revenue generation over a longer period. Revenue expenditures are the ongoing operating expenses, which are short-term expenses used to run the daily business operations.
This document discusses the reconciliation of cost accounts and financial accounts. When these two sets of accounts are maintained separately, the profits or losses reported may differ. A reconciliation statement is prepared to identify reasons for any differences. Common reasons for differences include items recorded in one set of accounts but not the other, different valuation methods for inventory, and over- or under-absorption of overhead costs. The reconciliation statement calculates the adjustments needed to make the profit/loss figures reported by the two sets of accounts agree.
The document discusses cost accounting and its evolution from a technique for ascertaining product costs to a technique for cost control and reduction. It defines cost accounting as recording, classifying, and summarizing costs to determine product costs, plan and control costs, and provide information for management decision making. Cost accounting is distinguished from financial accounting in that it focuses on internal cost analysis for management purposes, uses estimated data, and classifies costs as fixed and variable.
Ind AS 18 provides guidance on accounting for revenue. It aims to determine when to recognize revenue. Revenue is recognized when future economic benefits flow to the entity and can be reliably measured.
The standard addresses revenue recognition for sale of goods, rendering of services, and interest, royalties or dividends. For sale of goods, revenue is recognized when risks and rewards of ownership transfer. For services, revenue is recognized by reference to completion percentage. Interest is recognized using effective interest rate method, while royalties and dividends are recognized on an accrual basis.
The document also discusses concepts like deferred payment terms, non-cash transactions, and components of transactions. Disclosures required include revenue categories, accounting policies,
This document discusses accounting concepts for managers, including:
1. The trading account is used to calculate gross profit by subtracting the cost of goods sold from sales. Opening and closing inventory are debited and credited, respectively, and purchases less returns are debited.
2. The profit and loss account calculates net profit by subtracting expenses from gross profit. Expenses are debited whether paid or not, and incomes are credited whether received or not.
3. Capital expenditures provide long-term benefits while revenue expenditures only benefit the current year and are debited to the profit and loss account. Trading and profit and loss accounts determine profit or loss over a period.
This document provides an overview of cost auditing. It defines cost auditing as checking costing systems and accounts to verify correctness and ensure adherence to cost accounting objectives. The objectives of cost auditing include determining and controlling costs to provide data for operational efficiency judgments. Cost auditing was first made mandatory in India and aims to curb profiteering and help pricing decisions. Key aspects reviewed in a cost audit are property/investment and efficiency. The cost auditor examines materials, labor, overhead records and more to assess performance and maximize returns.
This document provides an overview of Ind AS 116 on leases. It discusses the scope of leases covered, how to identify a lease by determining if a contract conveys the right to control the use of an identified asset. It provides examples of lease vs non-lease contracts and how to identify embedded leases. It also covers determining the lease term by considering non-cancellable periods and periods covered by options to extend or terminate the lease.
The document discusses inventory valuation and different methods used for valuing inventories. It defines inventories as assets held for sale, in production for sale, or materials/supplies used in production or rendering services. Inventories arise due to time lags in purchase and sale or processing. They must be valued at the lower of cost or net realizable value. Cost includes all purchase, conversion and other costs to bring inventory to its present condition/location excluding abnormal costs. Common costing methods are FIFO, LIFO and weighted average.
This document summarizes key aspects of Accounting Standard 19 (AS-19) related to accounting for leases in India. It discusses the differences between finance and operating leases, and the accounting treatment for lessors and lessees under each. It also covers sale and leaseback transactions, tax implications, and disclosure requirements as per AS-19.
The document discusses marginal costing and cost-volume-profit (CVP) analysis techniques for decision making. It defines marginal costing as the separation of total costs into fixed and variable costs to understand the effect of changes in output on profit. The key assumptions and terminologies of marginal costing like contribution, break-even point, profit-volume ratio, and margin of safety are explained. CVP analysis expresses the relationship between sales volume, costs, and profits and can be used to answer questions about break-even revenues, effects of price and cost changes, and achieving budgeted profit levels.
This document provides an overview of depreciation accounting. It defines depreciation and related terms like depletion, amortization, and obsolescence. It discusses the causes and objectives of charging depreciation. The document also explains factors affecting depreciation amounts and relevant accounting principles. Finally, it describes the straight line and written down value methods for allocating depreciation over the useful life of an asset.
This document discusses methods for valuing goodwill and shares. It defines goodwill as a company's reputation and brand value that allows it to earn above-average profits. Methods for valuing goodwill described include the average profit method, super profit method, capitalization of profit method, and annuity method. These methods calculate goodwill based on adjusting a company's historical profits. The document also defines shares and discusses methods for valuing shares not publicly traded, including the net asset method, yield method, and earning capacity method. The net asset method values shares based on a company's net assets, the yield method based on expected dividend returns, and earning capacity method based on rate of profits earned.
Marginal costing is a costing technique wherein the marginal cost, i.e. variable cost is charged to units of cost, while the fixed cost for the period is completely written off against the contribution.
The document discusses company analysis and stock valuation. It provides guidance on analyzing a company's competitive strategies, growth potential, management quality, and financials to estimate intrinsic value. Key steps include conducting a SWOT analysis, comparing intrinsic value to market price, and monitoring assumptions to determine when to sell. The overall aim is to identify undervalued stocks by focusing on long-term prospects and downside protection.
THIS IS ALL ABOUT ACCOUNTING STANDARD - 6 I.E., DEPRECIATION ACCOUNTING.
THE RULES AND REGULATIONS TO BE FOLLOWED WHILE CALCULATING DEPRECIATION OF A DEPRECIABLE FIXED ASSET.
This document provides information about accounting for non-profit organizations. It defines non-profits as entities that do not trade but rather provide services to members and society. Key features noted include the objective to provide services not earn profit, the use of a cashbook to record transactions, and preparation of receipts and payments, income and expenditure, and balance sheet statements. The receipts and payments statement is described as a summary of the cashbook that classifies receipts and payments without distinguishing between capital and revenue items.
The document discusses the meaning and calculation of capital gains under the Income Tax Act.
Some key points:
- Capital gains arise from the profit earned on the transfer of a capital asset like property, shares, etc.
- It is taxed under a separate head called "capital gains" and is deemed as income of the year in which the transfer took place.
- Capital gains are classified as short-term or long-term depending on the period of holding. Assets held for less than 36 months for immovable property and 12 months for others attract short-term capital gains tax.
- The capital gain amount is calculated by deducting the indexed cost of acquisition and improvement from the sale consideration. Various
Cost accounting is the process of collecting, assigning, and evaluating costs to products and services to understand where a company earns and loses money. It provides input for managerial decision making regarding future profits. Cost accounting objectives include determining selling prices, controlling costs, providing information for decisions, ascertaining costing profit, and facilitating financial statements preparation. It is important for management to determine product costs, facilitate planning and control, eliminate waste, provide estimates and identify unprofitable activities. Cost accounting also benefits employees through incentive plans.
This document provides an introduction to cost accounting, including its objectives, importance, and key concepts. It discusses the emergence of cost accounting as a field and defines it as a method for accumulating, classifying, and interpreting cost information to aid in planning, control, and decision making. The document also outlines the advantages of cost accounting for management, employees, creditors, and consumers. It emphasizes that cost accounting is important for controlling costs, measuring efficiency, budgeting, and determining prices. Finally, it discusses essential conditions and factors for installing an effective cost accounting system, such as having efficient material and wage payment controls.
This document provides an introduction to cost and management accounting. It discusses key concepts such as cost accounting, management accounting, costing, and the differences between financial accounting and management accounting. The objectives of cost accounting are to ascertain costs, control costs, aid decision-making, determine selling prices, and more. Management accounting builds on cost and financial accounting data to provide information for planning, control, and decision-making. It focuses on the internal needs of management rather than external reporting.
Financial assets are non-physical claims or rights to cash flows or other assets that are represented by a paper or electronic certificate. Unlike tangible real assets like land or equipment, financial assets derive their value from contractual agreements rather than physical attributes. Common types of financial assets include stocks, bonds, bank balances, and investments that can be readily converted into cash. Marketable securities refer to liquid financial assets that are easily traded on organized markets and can be quickly converted to cash at a reasonable price, such as commercial paper, money market instruments, and certain stocks and bonds.
Regulation of the insurance industry in India is governed by the Insurance Act of 1938, the IRDA Act of 1999, and the Insurance Amendment Act of 2002. The IRDA has prescribed accounting formats and standards that insurance companies must follow.
There are two main types of insurance business - life insurance and general insurance. Financial statements for both include a revenue account, profit and loss account, and balance sheet. The revenue account shows incomes and expenses, the profit and loss account shows profits appropriated to shareholders, and the balance sheet records assets and liabilities. Additionally, life insurance companies must prepare a receipts and payments account and segmental reporting.
1. Non-trading concerns are organizations dedicated to furthering social causes through their surpluses rather than distributing income. They are usually nonprofit and tax-exempt.
2. Key accounts for non-trading concerns include the receipts and payments account, income and expenditure account, and balance sheet. The receipts and payments account shows cash receipts and payments, while the income and expenditure account is similar to a profit and loss statement.
3. Items peculiar to non-trading concerns include donations, legacies, entrance fees, life membership fees, and subscriptions, which require special treatment in the accounts depending on whether they are recurring, capital, or for a specific purpose.
The document discusses how to prepare trading, profit and loss, and balance sheet statements. It provides steps for preparing trading and profit and loss accounts, including debiting opening stock, purchases, and expenses to trading and crediting sales and closing stock, then transferring gross profit or loss. It explains balance sheets have asset and liability sides and different ordering approaches. Assets are classified as fixed, current, tangible, intangible, and liabilities as long-term and current.
SMU_MBA-Solved-Assignment-Mb0041 financial and management accounting spring20...pkharb
This document provides details of an assignment for a Financial and Management Accounting subject in an MBA program. It includes 5 questions related to analyzing transactions under the traditional accounting approach, journal entries for errors detected in a trial balance, preparing an adjusted trial balance, analyzing trend ratios for Infosys Technologies Ltd over 5 years, and explaining cash flow analysis and the preparation of a cash flow statement.
This document discusses accounting concepts for managers, including:
1. The trading account is used to calculate gross profit by subtracting the cost of goods sold from sales. Opening and closing inventory are debited and credited, respectively, and purchases less returns are debited.
2. The profit and loss account calculates net profit by subtracting expenses from gross profit. Expenses are debited whether paid or not, and incomes are credited whether received or not.
3. Capital expenditures provide long-term benefits while revenue expenditures only benefit the current year and are debited to the profit and loss account. Trading and profit and loss accounts determine profit or loss over a period.
This document provides an overview of cost auditing. It defines cost auditing as checking costing systems and accounts to verify correctness and ensure adherence to cost accounting objectives. The objectives of cost auditing include determining and controlling costs to provide data for operational efficiency judgments. Cost auditing was first made mandatory in India and aims to curb profiteering and help pricing decisions. Key aspects reviewed in a cost audit are property/investment and efficiency. The cost auditor examines materials, labor, overhead records and more to assess performance and maximize returns.
This document provides an overview of Ind AS 116 on leases. It discusses the scope of leases covered, how to identify a lease by determining if a contract conveys the right to control the use of an identified asset. It provides examples of lease vs non-lease contracts and how to identify embedded leases. It also covers determining the lease term by considering non-cancellable periods and periods covered by options to extend or terminate the lease.
The document discusses inventory valuation and different methods used for valuing inventories. It defines inventories as assets held for sale, in production for sale, or materials/supplies used in production or rendering services. Inventories arise due to time lags in purchase and sale or processing. They must be valued at the lower of cost or net realizable value. Cost includes all purchase, conversion and other costs to bring inventory to its present condition/location excluding abnormal costs. Common costing methods are FIFO, LIFO and weighted average.
This document summarizes key aspects of Accounting Standard 19 (AS-19) related to accounting for leases in India. It discusses the differences between finance and operating leases, and the accounting treatment for lessors and lessees under each. It also covers sale and leaseback transactions, tax implications, and disclosure requirements as per AS-19.
The document discusses marginal costing and cost-volume-profit (CVP) analysis techniques for decision making. It defines marginal costing as the separation of total costs into fixed and variable costs to understand the effect of changes in output on profit. The key assumptions and terminologies of marginal costing like contribution, break-even point, profit-volume ratio, and margin of safety are explained. CVP analysis expresses the relationship between sales volume, costs, and profits and can be used to answer questions about break-even revenues, effects of price and cost changes, and achieving budgeted profit levels.
This document provides an overview of depreciation accounting. It defines depreciation and related terms like depletion, amortization, and obsolescence. It discusses the causes and objectives of charging depreciation. The document also explains factors affecting depreciation amounts and relevant accounting principles. Finally, it describes the straight line and written down value methods for allocating depreciation over the useful life of an asset.
This document discusses methods for valuing goodwill and shares. It defines goodwill as a company's reputation and brand value that allows it to earn above-average profits. Methods for valuing goodwill described include the average profit method, super profit method, capitalization of profit method, and annuity method. These methods calculate goodwill based on adjusting a company's historical profits. The document also defines shares and discusses methods for valuing shares not publicly traded, including the net asset method, yield method, and earning capacity method. The net asset method values shares based on a company's net assets, the yield method based on expected dividend returns, and earning capacity method based on rate of profits earned.
Marginal costing is a costing technique wherein the marginal cost, i.e. variable cost is charged to units of cost, while the fixed cost for the period is completely written off against the contribution.
The document discusses company analysis and stock valuation. It provides guidance on analyzing a company's competitive strategies, growth potential, management quality, and financials to estimate intrinsic value. Key steps include conducting a SWOT analysis, comparing intrinsic value to market price, and monitoring assumptions to determine when to sell. The overall aim is to identify undervalued stocks by focusing on long-term prospects and downside protection.
THIS IS ALL ABOUT ACCOUNTING STANDARD - 6 I.E., DEPRECIATION ACCOUNTING.
THE RULES AND REGULATIONS TO BE FOLLOWED WHILE CALCULATING DEPRECIATION OF A DEPRECIABLE FIXED ASSET.
This document provides information about accounting for non-profit organizations. It defines non-profits as entities that do not trade but rather provide services to members and society. Key features noted include the objective to provide services not earn profit, the use of a cashbook to record transactions, and preparation of receipts and payments, income and expenditure, and balance sheet statements. The receipts and payments statement is described as a summary of the cashbook that classifies receipts and payments without distinguishing between capital and revenue items.
The document discusses the meaning and calculation of capital gains under the Income Tax Act.
Some key points:
- Capital gains arise from the profit earned on the transfer of a capital asset like property, shares, etc.
- It is taxed under a separate head called "capital gains" and is deemed as income of the year in which the transfer took place.
- Capital gains are classified as short-term or long-term depending on the period of holding. Assets held for less than 36 months for immovable property and 12 months for others attract short-term capital gains tax.
- The capital gain amount is calculated by deducting the indexed cost of acquisition and improvement from the sale consideration. Various
Cost accounting is the process of collecting, assigning, and evaluating costs to products and services to understand where a company earns and loses money. It provides input for managerial decision making regarding future profits. Cost accounting objectives include determining selling prices, controlling costs, providing information for decisions, ascertaining costing profit, and facilitating financial statements preparation. It is important for management to determine product costs, facilitate planning and control, eliminate waste, provide estimates and identify unprofitable activities. Cost accounting also benefits employees through incentive plans.
This document provides an introduction to cost accounting, including its objectives, importance, and key concepts. It discusses the emergence of cost accounting as a field and defines it as a method for accumulating, classifying, and interpreting cost information to aid in planning, control, and decision making. The document also outlines the advantages of cost accounting for management, employees, creditors, and consumers. It emphasizes that cost accounting is important for controlling costs, measuring efficiency, budgeting, and determining prices. Finally, it discusses essential conditions and factors for installing an effective cost accounting system, such as having efficient material and wage payment controls.
This document provides an introduction to cost and management accounting. It discusses key concepts such as cost accounting, management accounting, costing, and the differences between financial accounting and management accounting. The objectives of cost accounting are to ascertain costs, control costs, aid decision-making, determine selling prices, and more. Management accounting builds on cost and financial accounting data to provide information for planning, control, and decision-making. It focuses on the internal needs of management rather than external reporting.
Financial assets are non-physical claims or rights to cash flows or other assets that are represented by a paper or electronic certificate. Unlike tangible real assets like land or equipment, financial assets derive their value from contractual agreements rather than physical attributes. Common types of financial assets include stocks, bonds, bank balances, and investments that can be readily converted into cash. Marketable securities refer to liquid financial assets that are easily traded on organized markets and can be quickly converted to cash at a reasonable price, such as commercial paper, money market instruments, and certain stocks and bonds.
Regulation of the insurance industry in India is governed by the Insurance Act of 1938, the IRDA Act of 1999, and the Insurance Amendment Act of 2002. The IRDA has prescribed accounting formats and standards that insurance companies must follow.
There are two main types of insurance business - life insurance and general insurance. Financial statements for both include a revenue account, profit and loss account, and balance sheet. The revenue account shows incomes and expenses, the profit and loss account shows profits appropriated to shareholders, and the balance sheet records assets and liabilities. Additionally, life insurance companies must prepare a receipts and payments account and segmental reporting.
1. Non-trading concerns are organizations dedicated to furthering social causes through their surpluses rather than distributing income. They are usually nonprofit and tax-exempt.
2. Key accounts for non-trading concerns include the receipts and payments account, income and expenditure account, and balance sheet. The receipts and payments account shows cash receipts and payments, while the income and expenditure account is similar to a profit and loss statement.
3. Items peculiar to non-trading concerns include donations, legacies, entrance fees, life membership fees, and subscriptions, which require special treatment in the accounts depending on whether they are recurring, capital, or for a specific purpose.
The document discusses how to prepare trading, profit and loss, and balance sheet statements. It provides steps for preparing trading and profit and loss accounts, including debiting opening stock, purchases, and expenses to trading and crediting sales and closing stock, then transferring gross profit or loss. It explains balance sheets have asset and liability sides and different ordering approaches. Assets are classified as fixed, current, tangible, intangible, and liabilities as long-term and current.
SMU_MBA-Solved-Assignment-Mb0041 financial and management accounting spring20...pkharb
This document provides details of an assignment for a Financial and Management Accounting subject in an MBA program. It includes 5 questions related to analyzing transactions under the traditional accounting approach, journal entries for errors detected in a trial balance, preparing an adjusted trial balance, analyzing trend ratios for Infosys Technologies Ltd over 5 years, and explaining cash flow analysis and the preparation of a cash flow statement.
The document contains questions and answers related to accounting concepts and transactions. It discusses entries for bad debts, depreciation, journal entries for salary payments and adjustments, differences between accounts receivable and payable, accrued interest, and the treatment of investments in the financial statements. It also addresses preliminary expenses, types of invoices, the order of assets in the balance sheet, central and state excise duties, and the effect of bad debts and destroyed assets on the balance sheet.
The document provides financial statement information for M/s R Company for 2004 and 2003, including balance sheets, income statements, and additional notes. It asks to prepare a statement of cash flows using the indirect method, noting equipment purchases and sales, bond redemptions, stock issuances, dividend payments, and other transactions during 2004.
The document discusses various types of adjustments in financial accounting including accruals, prepayments, and irrecoverable debts.
It explains that accruals involve increasing both a balance sheet and income statement account to properly record expenses incurred and revenues earned during an accounting period. Prepayments are costs that are recognized over multiple periods, such as prepaid rent. Irrecoverable debts, or bad debts, refer to accounts that are deemed uncollectible and must be written off.
The document provides examples and journal entries for accrued expenses, accrued revenues, prepaid expenses, unearned revenues, direct write-offs of bad debts, and use of an allowance method for bad debts. It concludes with multiple choice questions
This document provides an introductory lesson on fundamental accounting concepts for entrepreneurs and social entrepreneurship students. It discusses topics like business case analysis, calculating goodwill, partnership accounting, trial balance, and bank reconciliation. Examples and practice questions are provided throughout to help explain accounting principles and assumptions.
This document provides a 3-sentence introduction to fundamental accounting concepts for entrepreneurs and social entrepreneurship students. It discusses analyzing business cases to develop entrepreneurial skills, changing society and spreading knowledge. The document contains questions and answers on accounting topics to help students learn.
The document provides study notes on final accounts, including trading account, profit and loss account, and balance sheet.
It defines final accounts as the set of financial statements that include a trading account, profit and loss account, and balance sheet. The trading account shows gross profit or loss, the profit and loss account shows net profit or loss, and the balance sheet shows the financial position of the business.
Specimen templates are provided for a trading account, profit and loss account, and balance sheet. Key features and purposes of each statement are also summarized, such as the trading account determining gross profit/loss, the profit and loss account determining net profit/loss, and the balance sheet showing assets, liabilities, and
The document provides information about preparing a cash flow statement according to Accounting Standard 3 (Revised). It defines key terms like cash flows, cash and cash equivalents. It explains the direct and indirect methods for calculating cash flows from operating activities and discusses treatment of non-cash items. It also covers calculating cash flows from investing and financing activities and treatment of special items like taxes, interest and dividends. The document outlines the four steps for preparing a cash flow statement as calculating cash flows from operating, investing and financing activities and the net change in cash.
The document provides details about an accounting for business program by Afterscho☺ol Centre for Social Entrepreneurship. It includes instructions for participants to prepare trading and profit and loss accounts based on transaction details provided for a business owner named Goti for the year ended 31 March 2007. It also provides an additional information and asks participants to prepare a balance sheet as on that date.
This material is a part of our PGPSE programe. Our programme is available for any student after class 12th / graduation. AFTERSCHO☺OL conducts PGPSE, which is available free to all online students. There are no charges. PGPSE is a very rigorous programme, designed to give a comprehensive training in social entrepreneurship / spiritual entrepreneurship. This programme is aimed at those persons, who want to ultimately set up their own business enterprises which can benefit society substantially. PGPSE is a unique programme, as it combines industry consultancy, business solutions and case studies in addition to spirituality and social concerns. You can read the details at www.afterschoool.tk or at www.afterschool.tk
The document provides financial information for Aditya Mills Limited including the balance sheet and profit and loss statement. It then lists various ratios to calculate for Aditya Mills like current ratio, acid test ratio, stock turnover, debtors turnover, gross profit ratio, net profit ratio, operating ratio, earnings per share, and rate of return on equity capital. It also provides information on how certain transactions would impact the current ratio.
A N N U I T Y Q U E S T I O N S F O R A P T I T U D E T E S T SDr. Trilok Kumar Jain
This document provides an overview of basic accounting concepts and transactions. It discusses the fundamentals of debit and credit, the three types of accounts (real, nominal, personal), and how to record common accounting transactions like purchases, sales, expenses, and payments. It also covers accounting books like journals, ledgers, and cash books, and concepts like assets, liabilities, shares, debentures, and the accounting equation. Hypothetical transactions are provided as examples.
This document provides an overview of key accounting concepts for entrepreneurs, including:
1. The differences between debit and credit entries and how they relate to assets, expenses, and liabilities.
2. Examples of common accounting transactions and their journal entries.
3. The three main types of accounts - real, nominal, and personal.
4. Key financial instruments like shares, debentures, and their characteristics.
Class 12th Sample Questions For Accountancy Practicalcommerceatease
This document provides a sample of 25 questions that may appear on the practical exam for 12th grade Accountancy. The questions cover various topics related to ratio analysis, cash flow statements, and calculations of ratios like inventory turnover, debt-equity, and profit ratios using financial data. This is intended as a practice resource for commerce students appearing for their C.B.S.E board exams in 2020.
This material is for PGPSE / CSE students of AFTERSCHOOOL. PGPSE / CSE are free online programme - open for all - free for all - to promote entrepreneurship and social entrepreneurship PGPSE is for those who want to transform the world. It is different from MBA, BBA, CFA, CA,CS,ICWA and other traditional programmes. It is based on self certification and based on self learning and guidance by mentors. It is for those who want to be entrepreneurs and social changers. Let us work together. Our basic idea is that KNOWLEDGE IS FREE & AND SHARE IT WITH THE WORLD
Ratio analysis involves calculating and analyzing financial ratios to evaluate various aspects of a company's performance and financial position. Ratios are calculated using figures from the company's financial statements and can provide insight into areas like profitability, liquidity, asset utilization, debt levels, and investment returns. Common ratio categories include liquidity ratios, capital structure ratios, turnover/activity ratios, and profitability ratios. Ratio analysis allows comparison of a company's performance over time and against industry benchmarks to identify trends and areas for improvement.
This document discusses various accounting adjustments that may be needed when preparing final financial statements. It explains that adjustments are required to ensure revenues and expenses are matched and recorded in the correct accounting period. Common adjustments mentioned include closing stock, outstanding expenses, prepaid expenses, accrued income, depreciation, bad debts, and provisions. Formulas and journal entries for recording different types of adjustments are provided.
Control Accounts
Cambridge O Level
Cambridge IGCSE
Accounting
7110
7707
Control Accounts all the theories, past paper questions , model papers short notes
Similar to preparation of profit and loss account, and balance sheet of sole propritor (20)
Executive Directors Chat Leveraging AI for Diversity, Equity, and InclusionTechSoup
Let’s explore the intersection of technology and equity in the final session of our DEI series. Discover how AI tools, like ChatGPT, can be used to support and enhance your nonprofit's DEI initiatives. Participants will gain insights into practical AI applications and get tips for leveraging technology to advance their DEI goals.
This presentation was provided by Steph Pollock of The American Psychological Association’s Journals Program, and Damita Snow, of The American Society of Civil Engineers (ASCE), for the initial session of NISO's 2024 Training Series "DEIA in the Scholarly Landscape." Session One: 'Setting Expectations: a DEIA Primer,' was held June 6, 2024.
A review of the growth of the Israel Genealogy Research Association Database Collection for the last 12 months. Our collection is now passed the 3 million mark and still growing. See which archives have contributed the most. See the different types of records we have, and which years have had records added. You can also see what we have for the future.
Introduction to AI for Nonprofits with Tapp NetworkTechSoup
Dive into the world of AI! Experts Jon Hill and Tareq Monaur will guide you through AI's role in enhancing nonprofit websites and basic marketing strategies, making it easy to understand and apply.
A workshop hosted by the South African Journal of Science aimed at postgraduate students and early career researchers with little or no experience in writing and publishing journal articles.
Assessment and Planning in Educational technology.pptxKavitha Krishnan
In an education system, it is understood that assessment is only for the students, but on the other hand, the Assessment of teachers is also an important aspect of the education system that ensures teachers are providing high-quality instruction to students. The assessment process can be used to provide feedback and support for professional development, to inform decisions about teacher retention or promotion, or to evaluate teacher effectiveness for accountability purposes.
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preparation of profit and loss account, and balance sheet of sole propritor
1. SMART BOOK
ACCOUNTANCY 1
SMART BOOK SMART BOOK SMART BOOK INTERMEDIATE - FIRST YEAR
ACCOUNTANCY
SMART BOOK
UNIT –I CONCEPT OF BUSINESS
1) From the following Trial Balance of Mr. Johnson, prepare the
Trading, Profit and Loss Account and Balance Sheet for the year
ended 31-3-2014:
Dr Trial Balance as on 31-3-2014 Cr
Particulars Amount
Rs.
Particulars Amount
Rs.
Cash in hand
Cash at Bank
Purchases
Sales Returns
Wages
Salaries
Advertisement
Insurance
Furniture
Opening Stock
Machinery
Debtors
Carriage Inwards
Carriage outwards
Rent & Taxes
Drawings
Bills Receivable
6,000
12,500
78500
2000
8,000
12,500
3,000
1,100
12,000
40,000
35,000
23,000
1,000
1,500
2,500
4,800
9,000
2,52,400
Sales
Capital
Purchase Returns
Interest
Creditors
Bills Payable
Discount
1,32,000
95,000
1,000
900
10,000
11,500
2,000
2,52,400
2. SMART BOOK
ACCOUNTANCY 2
Adjustments:
1) Value of Stock as on 31-3-2014 is Rs. 37000.
2) Outstanding Wages Rs. 1,200; Salaries Rs. 2,900
3) Prepaid Insurance Rs. 450
4) Depreciate Furniture by 5%; Machinery by 10%
5) Write off Bad debts Rs. 2,000 and provide Bad debts reserve 5%.
Ans: Trading and Profit & Loss A/c of Mr. Johnson
Dr for the year ending 31-03-2014 Cr
Particulars Amount
Rs.
Amount
Rs.
Particulars Amount
Rs.
Amount
Rs.
To Opening Stock
To Purchases
Less : Returns
To Wages
Add : Outstanding
To Carriage In-
wards
To Gross Profit
To Salaries
Add : Outstanding
To Insurance
Less : Prepaid
To Advertisement
To Carriage Out-
wards
To Rent, taxes
To Bad debts
To Bad Debts Re-
serve
To Dep. On Furni-
ture
To Dep. On Ma-
chinery
To Net profit
78,500
1,000
8,000
1,200
12,500
2,900
1,100
450
40,000
77500
9,200
1,000
39,300
1,67,000
15,400
650
3,000
1,500
2,500
2,000
1150
600
3,500
11,900
42,200
By Sales
Less : Re-
turns
By Closing
Stock
By Gross
Profit
By Interest
By Discount
1,32,000
2,000 1,30,000
37,000
1,67,000
39,300
900
2,000
42,200
3. SMART BOOK
ACCOUNTANCY 3
Balance Sheet of Johnson as on 31-03-2014
Tutors Desk
Opening stock will come in the Debit Side of Trading Account.
Purchases will come in the Debit Side of Trading Account and
purchase returns should be deducted from it.
Wages come in the Debit Side of Trading Account by adding
outstanding wages.
Carriage inwards comes in the Debit Side of Trading Account.
Sales will come in the Credit Side of Trading Account.
Closing stock will come in the Credit Side of Trading Account.
The Credit Total of Trading Account (MINUS) Debit total of trading
account is Gross profit.
Liabilities Amount
Rs.
Amount
Rs.
Assets Amount
Rs.
Amount
Rs.
Creditors
Bills Payable
Outstanding
Wages
Outstanding
salary
Capital
Add : Net
Profit
Less : Draw-
ings
95000
11900
106900
4800
10,000
11,500
1,200
2,900
102,100
1,27,700
Cash in hand
Cash at bank
Closing Stock
Debtors
Less : Bad
Debts
Less : Reserve
Furniture
Less : Depre-
ciation
Machinery
Less : Depre-
ciation
Prepaid Insur-
ance
Bills Receiv-
able
23,000
2,000
21,000
1150
12,000
600
35,000
3,500
6,000
12,500
37,000
19,850
11,400
31,500
450
9,000
1,27,700
4. SMART BOOK
ACCOUNTANCY 4
Salaries will come in the Debit Side of profit and Loss Account and
outstanding salaries will be added to it.
Insurance will come in the Debit Side of profit and Loss Account and
prepaid Insurance will be deducted from it.
Advertisement will come in the Debit Side of profit and Loss
Account.
Carriage outwards will come in the Debit Side of profit and Loss
Account.
Rent, taxes will come in the Debit Side of profit and Loss Account.
Bad Debts will come in the Debit side of profit and Loss Account.
Bad Debts Reserve will come in the Debit Side of profit and Loss
Account.
Depreciation on Furniture and Depreciation on machinery will come
in the Debit Side of profit and Loss Account.
Interest Received comes in the Credit Side of profit and Loss
Account .
Discount Received comes in the Credit Side of profit and Loss
Account.
The Total credit of profit and Loss Account (MINUS) Total Debit of
profit and Loss Account is Net profit.
Creditors will come in the liabilities side of Balance Sheet.
Bill payable will come in the liabilities side of Balance Sheet.
Outstanding wages will come in the liabilities side of Balance Sheet.
Outstanding salary will come in the liabilities side of Balance Sheet.
Capital will come in the liabilities side of Balance sheet. And Net
profit should be added to capital.
Drawings should be deducted from capital
Cash in hand will come in the Assets side of Balance sheet.
Cash at Bank will come in the Assets side of Balance sheet.
Closing stock will come in the Assets side of Balance sheet.
Debtors will come in the Assets side of Balance sheet and Bad Debt
and Reserve for Bad Debts will be deducted from Debtors.
Furniture will come in the Assets side of Balance Sheet and
depreciation on Furniture will be deducted from it.
Machinery will come in the Assets side of Balance sheet and
depreciation on machinery will be deducted from it.
5. SMART BOOK
ACCOUNTANCY 5
2) From the following Trial Balance of Mr. kiran, prepare
the Trading, Profit and Loss account for the year ended
31.12.2013.
Dr Trial Balance as on 31.12.2013 Cr
Adjustments:
1.Closing Stock Rs. 56950
2.Depreciate Machinery by 10%, Patents by 15%
3.Outstanding Salaries Rs. 2400
4.Prepaid Insurance Rs. 320
5.Create 5% reserve for Bad Debts on Debtors.
Particulars
Amount
Rs. Particulars
Amount
Rs.
Cash balance
Bank balance
Purchases
Return Inward
Wages
Fuel
Carriage Outward
Carriage Inward
Opening Stock
Buildings
Machinery
Patents
Salaries
General expenses
Insurance
Drawing
Debtors
12000
42255
1,67,165
1,600
35,830
6000
2650
3150
43500
75,000
30,000
10,500
25,000
3,000
1600
22650
23000
504900
Sales
Return Outward
Creditors
Capital
3,15,000
2,900
12,000
175,000
504900
6. SMART BOOK
ACCOUNTANCY 6
Ans.
Trading and Profit & Loss A/c of Mr Kiran
Dr for the year ending 31-12-2013 Cr
Particulars Amount
Rs.
Amount
Rs.
Particulars Amount
Rs.
Amount
Rs.
To Opening Stock
To Purchases
Less : Returns
To Wages
To Fuel
To Carriage
Inward
To Gross Profit
To Salaries
Add : Out-
standing
To General
Expenses
To Insurance
Less : Prepaid
To Carriage Out-
wards
To Dep. On
Machinery
To Dep. On
Patents
To Bad Debts
Reserve
To Net Profit
167165
2,900
25,000
2,400
1600
320
43,500
1,64,265
35,830
6,000
3,150
1,17,605
3,70,350
27,400
3,000
1280
2,650
3,000
1,575
1150
77550
117605
By Sales
Less : Re-
turns
By Closing
Stock
By Gross
Profit
315000
1600 313400
56950
3,70,350
1,17605
117605
7. SMART BOOK
ACCOUNTANCY 7
Balance Sheet of Mr. kiran as on 31-12-2013
Opening stock will come in the Debit Side of Trading Account.
Purchases will come in the Debit Side of Trading Account and
purchase returns should be deducted from it.
Wages come in the Debit Side of Trading Account.
Carriage inwards comes in the Debit Side of Trading Account.
Fuel comes in the Debit Side of Trading Account.
Sales will come in the Credit Side of Trading Account
Closing stock will come in the Credit Side of Trading Account
The Credit Total of Trading Account (MINUS) Debit total of Trading
Account is Gross profit.
Liabilities Amount
Rs.
Amount
Rs.
Assets Amount
Rs.
Amount
Rs.
Outstanding
Salaries
Creditors
Capital
Add :
Net Profit
Less : Draw-
ings
175,000
77,550
2,52,550
22650
2,400
12,000
229900
2,44,300
Prepaid In-
surance
Cash
Balance
Bank
Balance
Closing
Stock
Debtors
Less : Bad
Debts
Machinery
Less :
Depreciation
Patents
Less :
Depreciation
Buildings
23,000
1150
30,000
3,000
10,500
1,575
320
12000
42255
56950
21,850
27,000
8,925
75,000
2,44,300
Tutors Desk
8. SMART BOOK
ACCOUNTANCY 8
Salaries will come in the Debit Side of profit and Loss Account and
outstanding salaries will be added to it
Insurance will come in the Debit Side of profit and Loss Account and
prepaid Insurance will be deducted from it
General expenses will come in the debit side of profit and loss
account.
Carriage outwards will come in the Debit Side of profit and Loss
account.
Bad Debts Reserve will come in the Debit Side of profit and Loss
account.
Depreciation on patents and Depreciation on machinery will come in
the Debit Side of profit and Loss Account.
The Total credit of profit and Loss Account (MINUS) Total Debit of
profit and Loss Account is Net profit.
Creditors will come in the liabilities side of Balance Sheet.
Outstanding salary will come in the liabilities side of Balance Sheet.
Capital will come in the liabilities side of Balance sheet. And Net
profit should be added to capital.
Drawings should be deducted from capital.
Cash balance will come in the Assets side of Balance sheet.
Bank balance will come in the Assets side of Balance sheet.
Closing stock will come in the Assets side of Balance sheet.
Debtors will come in the Assets side of Balance sheet and Reserve
for Bad Debts will be deducted from Debtors.
Patents will come in the Assets side of Balance Sheet and
Depreciation on patents will be deducted from it.
Machinery will come in the Assets side of Balance sheet and
Depreciation on machinery will be deducted from it.
Prepaid insurance will come in the Assets side of Balance Sheet.
Building will come in the assets of the balance sheet.
9. SMART BOOK
ACCOUNTANCY 9
3) From the following Trial Balance of Mr. Manohar, prepare the
Trading, Profit & Loss account and Balance Sheet for the year
ended 31.12.2010.
Dr Trial Balance as on 31.12.2010 Cr
Adjustments:
1) Outstanding Wages Rs. 3,100 and Outstanding Salaries Rs. 2,225
2) Prepaid Insurance Rs. 125
3) Create 5% reserve for Bad Debts on Debtors
4) Depreciate Furniture by Rs. 500 and Machinery by Rs. 1300
5) Closing Stock Rs. 24,500
Particulars Amount
Rs.
Particulars Amount
Rs.
Salaries
Purchases
Wages
Carriage on Purchases
Office Expenses
Commission
Debtors
Furniture
Machinery
Insurance
Bills Receivable
Cash balance
Bank balance
9,800
21,600
12000
1300
850
500
15,000
5,000
13,000
500
2,300
23000
42,750
1,47,600
Sales
Creditors
Capital
Bills Payable
87,000
12,000
45,000
3,600
1,47,600
10. SMART BOOK
ACCOUNTANCY 10
Ans.
Trading and Profit & Loss A/c of Mr. Manohar
for the year ended 31-12-2010
Dr Cr
Particulars Amount
Rs.
Amount
Rs.
Particulars Amount
Rs.
Amount
Rs.
To Purchases
To Wages
Add : Out-
standing
To Carriage on
Purchases
To Gross Profit
To Salaries
Add : Out-
standing
To Office Ex-
penses
To Commission
To Insurance
Less : Prepaid
To Reserve for
Bad Debts
To Dep. On
Furniture
To Dep. On
Machinery
To Net Profit
(Transferred to
Capital A/c)
12,000
3,100
9,800
2,225
500
125
21,600
15100
1,300
73,500
1,11,500
12,025
850
500
375
750
500
1300
57200
73,500
By Sales
By Closing
Stock
By Gross
Profit
87,000
24,500
1,11500
73,500
73,500
11. SMART BOOK
ACCOUNTANCY 11
Balance Sheet of Mr. Manohar as on 31-12-2010
Purchases will come in the Debit Side of Trading Account.
Wages come in the Debit Side of Trading Account by adding
outstanding wages. Carriage on purchases is also known as
carriage inward, it comes in the debit side of trading account.
Sales will come in the Credit Side of Trading Account.
Closing stock will come in the Credit Side of Trading Account
The Credit Total of Trading Account (MINUS) Debit total of trad-
ing account is Gross profit.
Salaries will come in the Debit Side of profit and Loss Account and
outstanding salaries will be added to it.
Insurance will come in the Debit Side of profit and Loss Account
and prepaid Insurance will be deducted from it.
Office Expenses will come in the Debit Side of profit and Loss
Account.
Liabilities
Amount
Rs.
Amount
Rs. Assets
Amount
Rs.
Amount
Rs.
Capital
Add : Net
Profit
Creditors
Bills Payable
Outstanding
Wages
Outstanding
Salaries
45,000
57,200 102200
12,000
3,600
3,100
2225
123125
Cash in hand
Cash at bank
Bills Receiv-
able
Machinery
Less : Depre-
ciation
Furniture
Less : Depre-
cation
Debtors
Less: Re-
serves for Bad
debts
Closing Stock
Prepaid Insur-
ance
13,000
1300
5,000
500
15,000
750
23,000
42,750
2,300
11,700
4500
14,250
24,500
125
123125
Tutors Desk
12. SMART BOOK
ACCOUNTANCY 12
Commission will come in the Debit Side of profit and loss.
Bad Debts Reserve will come in the Debit Side of profit and Loss
Account.
Depreciation on Furniture and Depreciation on machinery will come
in the Debit Side of profit and Loss Account.
The Total credit of profit and Loss Account (MINUS) Total Debit of
profit and Loss Account is Net profit.
Creditors will come in the liabilities side of Balance Sheet.
Bill payable will come in the liabilities side of Balance Sheet.
Outstanding wages will come in the liabilities side of Balance Sheet.
Outstanding salary will come in the liabilities side of Balance Sheet.
Capital will come in the liabilities side of Balance sheet. And Net
profit should be added to capital.
Cash in hand will come in the Assets side of Balance sheet.
Cash at Bank will come in the Assets side of Balance sheet.
Closing stock will come in the Assets side of Balance sheet.
Debtors will come in the Assets side of Balance sheet and reserve for
Bad Debts will be deducted from Debtors.
Furniture will come in the Assets side of Balance Sheet and
depreciation on Furniture will be deducted from it.
Machinery will come in the Assets side of Balance sheet and
depreciation on machinery will be deducted from it.
Prepaid insurance will come in the Assets side of Balance Sheet.
Bills Receivable will come in the Assets side of Balance Sheet.
13. SMART BOOK
ACCOUNTANCY 13
4) From the following particulars, prepare Trading, Profit & Loss
Account and balance Sheet for the year ended 31-03-2013
Dr Cr
Adjustments:
1) Closing Stock Rs. 84,800
2) Interest on Capital 6%, is to be provided
3) Write off Rs. 3,800 as Bad Debts and provide 5% Reserve for
Doubtful Debts.
4) Outstanding Wages Rs. 2,600
Particulars Amount
Rs.
Particulars Amount
Rs.
Cash
Factory Insurance
Audit Charges
Goodwill
Wages
Debtors
Opening Stock
Machinery
Purchases
Carriage Inwards
Salaries
Office Rent
bank
Rent paid in advance
98,200
4250
3,500
30,000
8500
40,000
28500
56400
126500
2,000
32,500
8,000
100000
1000
539350
43,000
14,500
1,78000
16500
273000
3,000
7850
3,500
539350
Creditors
Bills Payable
Capital
Commission
received
Sales
Return Out-
wards
Interest
received
Outstanding
Salaries
14. SMART BOOK
ACCOUNTANCY 14
By Sales
By Closing
Stock
By Gross
Profit
By Commis-
sion Re-
ceived
By Interest
Received
Ans.
Trading and Profit & Loss A/c for the year ended
Dr 31-03-2013 Cr
Particulars
Amount
Rs.
Amount
Rs. Particulars
Amount
Rs.
Amount
Rs.
To Opening
Stock
To Purchases
Less: Returns
To Carriage In-
wards
To Factory In-
surance
To Wages
Add: Out-
standing
To Gross Profit
To Audit
Charges
To Salaries
To Office Rent
To Interest on
Capital
To Bad Debts
To Bad Debts
Reserve
To Net Profit
126500
3,000
8,500
2,600
28,500
123500
2000
4250
11,100
188,450
3,57,800
3,500
32,500
8,000
10,680
3,800
1,810
152,510
212,800
2,73,000
84,800
3,57,800
188,450
16,500
7,850
212,800
15. SMART BOOK
ACCOUNTANCY 15
Balance Sheet as on 31-03-2013
Opening stock will come in the Debit Side of Trading Account.
Purchases will come in the Debit Side of Trading Account and
purchase returns should be deducted from it.
Wages come in the Debit Side of Trading Account by adding
outstanding wages.
Carriage inwards comes in the Debit Side of Trading Account.
Factory insurance comes in the Debit Side of Trading Account.
Sales will come in the Credit Side of Trading Account.
Closing stock will come in the Credit Side of Trading Account
The Credit Total of Trading Account (MINUS) Debit total of Trading
account is Gross profit.
Liabilities
Amount
Rs.
Amount
Rs. Assets
Amount
Rs.
Amount
Rs.
Outstanding
Salaries
Outstanding
Wages
Creditors
Bills Payable
Capital
Add:
Interest
Add:
Net Profit
178,000
10,680
188680
152,510
3,500
2,600
43,000
14,500
341190
404790
Cash
Machinery
Debtors
Less: Bad
Debts
Less:
Reserve
Closing Stock
Goodwill
Bank
Rent paid in
advance
40,000
3,800
36,200
1,810
98,200
56,400
34,390
84,800
30,000
100000
1,000
404790
Tutors Desk
16. SMART BOOK
ACCOUNTANCY 16
Salaries will come in the Debit Side of profit and Loss Account.
Audit charges will come in the Debit Side of profit and Loss Account.
Office rent will come in the Debit Side of profit and Loss Account.
Interest on capital will come in the Debit Side of profit and Loss
Account.
Bad Debts will come in the Debit side of profit and Loss Account.
Bad Debts Reserve will come in the Debit Side of profit and Loss
Account.
Interest Received comes in the Credit Side of profit and Loss
Account .
Discount Received comes in the Credit Side of profit and Loss
Account
The Total credit of profit and Loss Account (MINUS) Total Debit of
profit and Loss Account is Net profit.
Creditors will come in the liabilities side of Balance Sheet.
Bill payable will come in the liabilities side of Balance Sheet.
Outstanding wages will come in the liabilities side of Balance Sheet.
Outstanding salary will come in the liabilities side of Balance Sheet.
Capital will come in the liabilities side of Balance sheet. And Net
profit should be added to capital.
Interest on capital should be added to capital.
Cash will come in the Assets side of Balance sheet.
Closing stock will come in the Assets side of Balance sheet.
Debtors will come in the Assets side of Balance sheet and Bad Debt
and Reserve for Bad Debts will be deducted from Debtors.
Machinery will come in the Assets side of Balance sheet.
Good will come in the Assets side of Balance Sheet.
Bank will come in the Assets side of Balance Sheet
Rent paid in advance will come in the Asset side of Balance sheet.
17. SMART BOOK
ACCOUNTANCY 17
5) The following is the Trial Balance of Ms. swapna. Prepare
Trading and Profit & Loss account for the year ending 31-12-
2011 and Balance Sheet as on that date.
Ans:
Trial Balance
Adjustments:
1) Closing Stock as on 31.12.2011 Rs. 86700
2) Rent Accrued Rs. 500
3) Outstanding Wages Rs.1200, Salaries Rs. 2650
4) Depreciation on Buildings 5%, Furniture 10%
5) Bad Debts Rs. 7125, Provision for Bad Debts 5% maintained
Particulars
Debit
Rs.
Credit
Rs.
Purchases, Sales
Returns
Capital
Drawings
Advertisement
Salaries
Carriage Inwards
Custom Duties
Wages
Buildings
Furniture
Rent
Discount
Debtors, Creditors
Bank Loan
165000
4250
4,000
6,000
19800
1,000
1500
3,800
195,000
60,000
1350
138000
599700
315000
5000
138000
1200
1685
16000
122815
599700
18. SMART BOOK
ACCOUNTANCY 18
Ans.
Trading and Profit & Loss A/c of Ms. swapna as on 31-12-2011
Dr cr
Particulars
Amount
Rs.
Amount
Rs. Particulars
Amount
Rs.
Amount
Rs.
To Purchase a/c
Less: Returns
To Carriage
Inwards
To Custom
Duties
To Wages
Add: Out-
standing
To Gross Profit
To Salaries
Add:
Outstanding
To Advertise-
ment
To Discount
To Dep. On
Building
To Dep. On
Furniture
To Bad Debts
To Bad Debts
Reserve
(1,38,000 –
7125 =
130875)
5
(130875 X 100
= 6544)
To Net Profit
165,000
5,000
3,800
1200
19800
2650
160,000
1,000
1500
5000
229950
397450
22450
6,000
1350
9750
6000
7125
6544
174116
233335
By Sales
Less: Returns
By Closing
Stock
By Gross Profit
By Rent
Add: Accrued
By Discount
310750
86700
397450
229950
1,700
1685
233335
315,000
4,250
1200
500
19. SMART BOOK
ACCOUNTANCY 19
Balance sheet of Ms. Swapna as on 31-12-2011
Purchases will come in the Debit Side of Trading Account and
purchase returns should be deducted from it.
Wages come in the Debit Side of Trading Account by adding
outstanding wages.
Carriage inwards comes in the Debit Side of Trading Account.
Custom Duty comes in the Debit Side of Trading Account.
Sales will come in the Credit Side of Trading Account.
Closing stock will come in the Credit Side of Trading Account.
The Credit Total of Trading Account (MINUS) Debit total of Trading
Account is Gross profit.
Salaries will come in the Debit Side of profit and Loss Account and
outstanding salaries will be added to it.
Liabilities
Amount
Rs.
Amount
Rs. Assets
Amount
Rs.
Amount
Rs.
Outstanding
Wages
Outstanding
salaries
Creditors
Bank Loan
Capital
Add: Net
Profit
Less:
Drawings
138000
174116
312116
4000
1200
2650
16000
122815
308116
450781
Closing
Stock
Debtors
Less: Bad
Debts
Less:
Reserve
Furniture
Less:
Depreciation
Buildings
Less:
Depreciation
Accrued
Rent
138000
7125
130875
6544
60000
6000
195000
9750
86700
124331
54000
185250
500
450781
Tutors Desk
20. SMART BOOK
ACCOUNTANCY 20
Advertisement will come in the Debit Side of profit and Loss Account.
Discount will come in the Debit Side of profit and Loss Account.
Bad Debts will come in the Debit side of profit and Loss Account.
Bad Debts Reserve will come in the Debit Side of profit and Loss
account.
Depreciation on Furniture and Depreciation on building will come in
the Debit Side of profit and Loss Account.
Discount Received comes in the Credit Side of profit and Loss
account.
Rent Received comes in the Credit Side of profit and Loss Account
and it will added by Accrued Rent.
The Total credit of profit and Loss Account (MINUS) Total Debit of
profit and Loss Account is Net profit.
Creditors will come in the liabilities side of Balance Sheet.
Bank loan will come in the liabilities side of Balance Sheet.
Outstanding wages will come in the liabilities side of Balance Sheet.
Outstanding salary will come in the liabilities side of Balance Sheet.
Capital will come in the liabilities side of Balance sheet. And Net
profit should be added to capital.
Drawings should be deducted from capital
Closing stock will come in the Assets side of Balance sheet.
Debtors will come in the Assets side of Balance sheet and Bad Debt
and Reserve for Bad Debts will be deducted from Debtors.
Furniture will come in the Assets side of Balance Sheet and
Depreciation on Furniture will be deducted from it.
Building will come in the Assets side of Balance sheet and
depreciation on machinery will be deducted from it.
Accrued rent will come in the Assets side of Balance Sheet.