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llnAL ACCCun1S

8ALANCL SnLL1 (or poslLlon sLaLemenL) shows


Lhe f|nanc|a| pos|t|on of an enLerprlse aL a
parLlcular polnL of Llme
1rad|ng and rof|t and Loss Account (lncome
SLaLemenL) shows Lhe f|nanc|a| performance
of buslness operaLlons dur|ng an account|ng
per|od
18AulnC ACCCun1
,LANING
1radlng a/c ls one of Lhe flnanclal sLaLemenLs
whlch shows Lhe resulL of buylng and selllng
of goods and/or servlces durlng an accounLlng
perlod
UkCSL CI 1kADING ACCCUN1
1radlng a/c ls prepared Lo know Lhe gross
proflL or gross loss durlng Lhe accounLlng
perlod
ConLenLs of 1radlng AccounL
lLems Lo be shown on deblL slde
%a) Cpen|ng Stock refers Lo Lhe closlng sLock of
unsold goods aL Lhe end of prevlous accounLlng
perlod whlch has been broughL forward ln Lhe
currenL accounLlng perlod
%) urchases refer Lo Lhose goods whlch have been
boughL for resale lL lnclude cash as well as
credlL purchases ueducLlon Lo be done from
purchase
(l) urchase 8eLurn
(ll) Coods wlLhdrawn by proprleLor for personal use
(lll) Coods dlsLrlbuLed by way of free samples
(lv) Coods glven as charlLy
(c) D|rect expenses refer Lo all Lhose expenses
whlch are lncurred from Lhe sLage of purchase
Llll Lhe sLage of maklng Lhe goods ln saleable
condlLlon Such expenses lnclude Lhe
followlng expenses
(l) lrelghL lnwards
(ll) lmporL duLy
(lll) CcLrol (local Laxes)
(lv) Carrlage lnwards
(v) Wages eLc
lLems Lo be shown on Lhe credlL slde
%a) Sa|es refer Lo Lhe sales of Lhose goods whlch
have been boughL for resale Sales lnclude
cash as well as credlL sales Sales reLurn are
shown by way of deducLlon
%) C|os|ng stock refers Lo Lhe sLock of unsold
goods aL Lhe end of Lhe currenL accounLlng
perlod
lormaL of 1radlng AccounL
18AulnC A/C
(for Lhe year ended )
art|cu|ars Amount art|cu|ars Amount
1o openlng sLock
1o purchases
Less urchase 8eLurns
1o wages
1o wages salarles
1o dlrecL expenses
1o carrlage/carrlage
lnwards/carrlage on purchase
1o gas fuel and power
1o frelghL ocLrol and carLage
1o manufacLurlng expenses
1o facLory expenses
1o dock charges
1o lmporL duLy or cusLom duLy
1o exclse duLy
1o gross proflL (balanclng flgure)
8y sales
less Sales reLurns
8y closlng sLock
8y gross loss
(balanclng flgure)
lormaL of roflL and Loss AccounL
art|cu|ars Amount art|cu|ars Amount
1o gross |oss $d
Cff|ce expenses
1o sa|ar|es
1o sa|ar|es wages
1o rent rates taxes
1o pr|nt|ng stat|onery
1o postage te|egram
1o ||ght|ng
1o |ega| charges
1o trave|||ng expenses
1o |nsurance prem|um
1o te|ephone charges
1o trade$genera| expenses
Se|||ng and d|str|ut|on expns
1o carr|age outward
1o advert|sement
1o comm|ss|on
1o addets
1o export duty
8y gross prof|t $d
8y rent
8y d|scount rece|ved
8y comm|ss|on rece|ved
8y |nterest on
|nvestment
8y d|v|dend on shares
8y ad dets recovered
8y prof|t on sa|e of
assets
8y net |oss %|f any)
%a|anc|ng f|gure)
8Cll1 Anu LCSS A/C
(for Lhe year endlng )
art|cu|ars Amount art|cu|ars Amount
,|sce||aneous expns
1o d|scount
to sa|es tax
1o repa|rs
1o deprec|at|on
1o |nterest %dr)
1o ank charges
1o |oss on sa|e of assets
1o net prof|t
%a|anc|ng f|gure)
8ALAnCL SPLL1
8ALAnCL SPLL1
As on
L|a|||t|es Amount Assets Amount
Cap|ta|
Add Net rof|t
Add Interest on cap|ta|
Less Net Loss
Less Draw|ngs
Less Interest on draw|ngs
Less Income tax
Less L|fe Insurance
rem|um
Long term |oans
8ank overdraft
8|||s paya|e
Sundry cred|tors
Cutstand|ng expenses
Unearned Income
Iurn|ture
,otor veh|c|e
Long term |nvestments
|ant and mach|nery
Land and u||d|ngs
atents
Goodw|||
Cash |n hand
Cash at ank
8|||s rece|va|e
Short term |nvestment
Sundry detors
C|os|ng stock
repa|d expenses
Accrued |ncome
; lrom Lhe followlng Lrlal balance of Shrl 8al 8ahadur prepare Lradlng and proflL and
loss a/c for Lhe year endlng 31
sL
uecember 1993 and balance sheeL as on LhaL
daLe Closlng sLock on 31
sL
uecember 1993 was valued aL 8s 23000
%Ans G$ 131000 N$ 9S100 8$S 269700)
De|t a|ances ks Cred|t a|ances ks
Stock %111993)
urchases
Sa|es return
Ire|ght and carr|age
Wages
Sa|ar|es
kepa|rs
1rade expenses
kent and taxes
Cash |n hand
8$k
Detors
|ant and mach|nery
Draw|ngs
8ank depos|t
20000
7S000
8000
7S00
36S00
12000
1200
4000
24000
S700
4000
SS000
160000
16600
20000
449S00
Sundry cred|tors
urchases return
Sa|es
Comm|ss|on
Cap|ta|
Interest on ank depos|t
8$
1S000
3000
2S0000
3300
170000
2000
6200
449S00
; lrom Lhe followlng Lrall balance prepare Lradlng and /L and balance sheeL
on 31
sL
March 2003 Lhe closlng sLock on 31
sL
March 2003 was 8s 7000
De|t a|ance ks Cred|t a|ances ks
Stock %142002)
Interest on |oan
urchases
Sa|es returns
Carr|age |nward
Wages
8ad dets
Advert|s|ng
Carr|age outward
Sa|ar|es
kent and |nsurance
Genera| expenses
Cash |n hand
8|||s rece|va|e
Sundry detors
Land and u||d|ng
,otor veh|c|e
Draw|ngs
Cash at ank
6800
300
66000
8000
1000
2000
S00
3S00
2S00
9000
3000
3400
2000
6000
20000
12000
10000
S000
3S00
164S00
Sundry cred|tors
urchases return
Sa|es
D|scount
Cap|ta|
Loan
8|||s paya|e
,|sc |ncome
kent rece|ved
10000
1S00
110000
S00
30000
9S00
2000
700
300
164S00
llnal accounLs wlLh ad[usLmenL
Important ad[ustments
1 C|os|ng stock
2 Cutstand|ng expenses
3 repa|d expenses
4 Deprec|at|on
S Accrued |ncome
6 Unearned |ncome
7 Interest on cap|ta|
8 Interest on draw|ngs
9 Interest on |oan
10 8ad dets
11 rov|s|on for ad and doutfu| dets
12 rov|s|on for d|scount of detors
13 rov|s|on for d|scount on cred|tors
14 Comm|ss|on on net prof|t
1S Deferred revenue expend|ture
16 Cap|ta| expend|ture treated as revenue expend|ture
1 CLCSING S1CCk
%|) Shown on the cred|t s|de of trad|ng a$c
%||) Shown as an asset |n the a|ance sheet
Note If appear |n tr|a| a|ance |t shou|d e shown on|y on the asset s|de of the
a|ance sheet
2 CU1S1ANDING LkLNSLS Ck LkLNSLS DUL 8U1 NC1 AID
%|) Shou|d e added to re|ated expenses on the de|t s|de of trad|ng and prof|t
and |oss a$c
%||) It w||| e shown on the ||a|||t|es s|de of the a|ance sheet
Note If appear |n tr|a| a|ance |t shou|d e shown on|y on the ||a|||ty s|de of
a|ance sheet
3 kLAID LkLNSLS Ck UNLkIkLD LkLNSLS Ck LkLNSLS AID IN ADVANCL
%|) 1he amount w||| e deducted from re|ated expenses appear|ng on the
de|t s|de of trad|ng and prof|t and |oss a$c
%||) It w||| e shown on the assets s|de of the a|ance sheet
Note If g|ven |n tr|a| a|ance shown on|y as asset |n the a|ance sheet
4 DLkLCIA1ICN
%|) It w||| e shown on the de|t s|de of prof|t and |oss a$c
%||) 1he amount w||| e deducted from re|ated assets on the asset s|de of 8$S
Note If appear |n tr|a| a|ance |t w||| e shown on|y on the de|t s|de of prof|t
and |oss a$c
; Irom the fo||ow|ng tr|a| a|ance of Shr| kadha kaman prepare trad|ng and prof|t
and |oss account for the year ended 31 st ,arch 1999 and a a|ance sheet
Dr a|ances ks Cr 8a|ances ks
Cpen|ng stock
urchases
Sa|es returns
Carr|age |nwards
|ant and mach|nery
Iurn|ture and f|xtures
Ireeho|d property
Cash |n hand
Carr|age outwards
Wages
Sa|ar|es
L|ght|ngfactory
Sundry detors
1rave|||ng expenses
kent and taxes
Draw|ngs
Insurance
Genera| expenses
16000
7S000
S000
1S00
40000
S000
4S6S0
S000
400
30000
18000
800
28000
1200
4800
S000
4S0
12200
294000
Cap|ta|
Sa|es
urchases returns
D|scount
Sundry cred|tors
8|||s paya|e
80000
200000
2000
S00
10000
1S00
294000
Ad[ustments
1 Stock on 31
st
,arch 1999 was va|ued at ks 20000
2 Wages amount|ng to ks 2000 and sa|ar|es amount|ng to ks 1S00 are
outstand|ng
3 repa|d |nsurance amounted to ks 1S0
4 rov|de deprec|at|on on p|ant and mach|nery at S and on furn|ture
and f|xtures at 10
S Cutstand|ng |ncome or accrued |ncome
%|) 1he amount sha|| e added to re|ated |ncome on the Cr S|de of $L
%||) Shown on the assets s|de of the a|ance sheet
%|||) If g|ven |n tr|a| a|ance shown on|y as an asset |n the a|ance sheet
6 Unearned |ncome or |ncome rece|ved |n advance
%|) It sha|| e deducted from re|ated |ncome on the Cr S|de of $L
%||) Shown on the ||a|||ty s|de of 8$S
%|||) If g|ven |n tr|a| a|ance shown on|y as an ||a|||ty |n the a|ance sheet
7 Interest on cap|ta|
%|) It sha|| e shown on the de|t s|de of $L
%||) 1he amount w||| e added to the cap|ta| on the ||a|||t|es s|de of 8$S
8 Interest on draw|ngs
%|) Shown on the cred|t s|de of prof|t and |oss account
%||) It w||| e deducted from cap|ta| on the ||a|||t|es s|de of 8$S
9 Interest on |oan
%|) It sha|| e shown on the de|t s|de of $L
%||) 1he amount w||| e added to the |oan shown on the ||a|||t|es
s|de of 8$S
; repare trad|ng and $L for the year ended 31
st
,arch 2000 and 8$S as on date
Name of accounts Dr a|ances Cr 8a|ances
Cap|ta|
Draw|ngs
I|xed assets
urchases and sa|es
keturns |nwards
keturns outwards
Carr|age
Wages
Sa|ar|es
kent
Insurance
Aud|t fees
Detors and cred|tors
8|||s rece|va|e and |||s paya|e
r|nt|ng and advert|s|ng
Comm|ss|on
Cpen|ng stock
Cash |n hand
Cash at ank
8ank |oan
Interest on |oan

12000
240000
340000
8000

1S600
36000
20000

1200
S00
128000
4800
1S00

4S000
14300
622S0

13S0
200000

6S0000

6000

13000

47S00
3600

400

10000

ADIUS1,LN1S
1 Stock at the end ks S1700
2 Deprec|ate f|xed assets y 10
3 Comm|ss|on earned ut not rece|ved amounted to ks 1S0
4 kent rece|ved |n advance ks 1000
S Interest on ank |oan Q 18 pa |n unpa|d for the |ast 3 months
6 A||ow 8 pa Interest on cap|ta| and charge ks 600 as |nterest on draw|ngs
10 8ad dets
%|) 8ad dets w||| e shown on the de|t s|de of $L
%||) It w||| e deducted from sundry detors on asset s|de of 8$S
%|||) If g|ven |n 1$8 |t w||| e shown on|y on the de|t s|de of $L
11 rov|s|on for ad and doutfu| dets
%|) Shown on the de|t s|de of $L as a separate |tem
%||) Shown on the assets s|de y way of deduct|on from the amount of
sundry detors %net of add|t|ona| ad dets)
8oth o|d and new prov|s|on for ad dets are g|ven |n the quest|on
8ad dets + new prov Ior ad dets o|d prov|s|on for ad dets
%1$8) %Ad[ust) %1$8)
8oth ad dets and prov|s|on for 8$D are g|ven |n ad[ustment
8ad dets + 8ad Dets + new prov for ad dets o|d prov|s|on for ad
dets
%1$8) %Ad[ust) %Ad[ust) %1$8)
; lollowlng are exLracLs of Lrlal balance of a flrm as aL 1 March 2002
ur Cr
Sundry debLor 203000
rovlslon for doubLful debLs 10000
8ad debLs 3000
AddlLlonal lnformaLlon
(l) AddlLlonal bad debLs 8s 3000
(ll) MalnLaln Lhe provlslon for doubLful debLs [10 on debLors
8s 8s
urawlngs
8ulldlng
Cpenlng sLock
Machlnery
lurnlLure
Carrlage lnwards
urchases
Ceneral expenses
8enL and Laxes
AdverLlsemenL
uebLors
Salarles
Sales reLurn
Cash
8ad debLs
lnsurance
Wages
uepreclaLlon
2300
12000
7834
4338
1140
932
33437
1766
770
3716
17860
10862
683
100
100
326
9973
342
108901
CaplLal
8ad debLs provlslon
CredlLors
6 loan
Sales
8ank overdrafL
30000
300
11133
3000
61723
343
108901
Ad[usLmenLs
1 8rlng provlslon for bad and doubLful debLs on debLors aL 3
2 Cne year's lnLeresL ls ouLsLandlng on loan
3 lnsurance prepald 8s 100
4 Closlng sLock ls 8s 8931
(Ans C/ 17773 n/L 900 8/S 43376)
8s 8s
Cpen|ng stock
urchases
Sa|es
Sa|es returns
Wages
Carr|age
8ad dets
8ad dets prov|s|on
Sundry detors
Sundry cred|tors
Cff|ce furn|ture
|ant and mach|nery
Lsta||shment charges
40000
180000
320000
SS00
22000
1200
600
1000
S0300
1S800
S300
78000
S100
Advert|sement
Goodw|||
Duty and c|ear|ng
charges
Comm|ss|on %Cr)
Cap|ta|
ersona| expenses
Investments
Cash
kent and |nsurance
SS00
10000
4200
800
120000
1S000
16100
16000
2800
1 kent outstand|ng ks S00 and |nsurance unexp|red %prepa|d) amounted to ks 300
2 Comm|ss|on amount|ng to ks 120 has een rece|ved |n advance
3 Wr|te off ks 300 as ad dets and prov|s|on for doutfu| dets at 2S on sundry
detors
4 Deprec|ate p|ant and mach|nery y S
S Stock on 31
st
,arch 2000 was ks 32000
12 rov|s|on for d|scount on detors
1 rov|s|on for d|scount on detors |s shown on the de|t s|de of prof|t
and |oss account
2 Amount of prov|s|on |s deducted from sundry detors on the assets s|de
of a|ance sheet
13 rov|s|on for d|scount on cred|tors
1 It |s shown on the cred|t s|de of prof|t and |oss account
2 Amount |s deducted from sundry cred|tors on the ||a|||t|es s|de of 8$S
Name of accounts Dr a|ances Cr 8a|ances
Cash |n hand
Cash at ank
urchases and sa|es
keturn |nwards
keturn outwards
Carr|age on purchases
Carr|age on sa|es
Iue| and power
Stock on 111999
8u||d|ng
,ach|nery
Detors and cred|tors
Investment
Interest on |nvestment
Loan from ,r A[ay Q20 taken on 1 ,ay 1999
kepa|rs
Genera| expenses
rov Ior ad dets
Wages and sa|ar|es
3800
8109
1S8000
2S00

1000
300
3900
28210
82000
12S000
72000
S0000

1481
20400

19720

32S000

1800

22000

4000
20000

2100

; repare 1rad|ng and rof|t and Loss A$c and a|ance sheet as on
31
st
Decemer 1999
,|sc rece|pts
Sa|es tax co||ected
Sa|es tax pa|d
Cap|ta|
L|fe |nsurance prem|um
Draw|ngs

3S00

2000
7000
S88920
20
S000

209000

S88920
Informat|on
1 8ad dets ks 1000
2 rov|s|on for doutfu| dets |s to e ma|nta|ned at S on sundry detors
3 rov|s|on 2 for d|scount on detors and cred|tors
4 Inc|ud|ng |n genera| expenses |nsurance prem|um ks 1000 pa|d for the one year
end|ng 31
st
,arch 2000
S C|os|ng stock was va|ued at ks 30000
6 rov|de 10 deprec|at|on on mach|nery
14 Comm|ss|on on net prof|t paya|e to manager
(l) Commlsslon ls shown on Lhe deblL slde of proflL and loss accounL
(ll) Commlsslon would be shown as a llablllLy on Lhe llablllLles slde of 8/S
MeLhod Lo calculaLe commlsslon
%a) Cn net prof|t efore charg|ng such comm|ss|on
Manager's commlsslon neL roflL before charglng commlsslon x 8aLe
100
(b) Cn net prof|t after charg|ng such comm|ss|on
Manager's commlsslon neL roflL before charglng commlsslon x 8aLe
100 + 8aLe
13 Deferred kevenue expend|ture 1he amounL Lo be wrlLLen off wlll be
deblLed Lo proflL and loss accounL ln respecL of every year Lhe
remalnlng balance wlll be LreaLed as an asseLs and shown on Lhe asseLs
slde of Lhe balance sheeL
16 Cap|ta| expend|ture treated as revenue expend|ture SomeLlmes caplLal
expendlLure ln wrongly LreaLed as revenue expendlLure Any expendlLure
on an asseL Llll lL ls puL Lo use ls Lo be added Lo relaLed asseL accounL lL
should noL be shown ln Lradlng and proflL and loss accounL lor example
a Wages lncluded 8s 2000 spenL on lnsLallaLlon of a new machlnery 1o
recLlfy Lhls error 8s 2000 wlll be deducLed from wages and added Lo
machlnery
b 8s 3000 spenL for Lhe erecLlon of a cycle shed were deblLed Lo repalrs
lor Lhe correcLlon of Lhls error 8s 3000 wlll be deducLed ouL of repalrs
and added Lo bulldlng
c Coods purchased for Lhe consLrucLlon of bulldlng were lncluded ln
purchases accounL lor recLlflcaLlon of Lhls error balance ln bulldlng
accounL wlll be lncreased whereas balance ln purchase accounL wlll be
reduced by an equal amounL
; repare Lradlng and proflL and loss a/c also prepare 8/S as on 31
sL
uec
1999
Cap|ta|
Cred|tors
Cutstand|ng expenses
kent rece|ved
urchases returns
Sa|es
rov|s|on for ad dets
Advert|sement deve|opment
|ant and mach|nery
Goodw|||
Agent's samp|es
Cpen|ng stock
Detors
Cash at ank
Cash |n hand
20S00
1S000
3400
300
2000
144800
300
4000
10000
2S00
13S0
16000
7300
1000
SS
Draw|ngs
urchases
Carr|age |nwards
Wages
ower
Dep Cf mach|nery
Sa|ary
D|scount rece|ved
Genera| expenses
repa|d expenses
Sa|ary of agent
kent and |nsurance
D|scount a||owed
Sa|es returns
Comm|ss|on to agent
2S00
8SS00
7S0
11S00
4000
S00
17200
900
4100
200
4SS0
99S0
2S00
300
144S
Ad[ustments
(l) Closlng sLock was valued aL 8s 13700 Coods cosLlng 8s 1000 was
desLroyed by flre 1he lnsurance company admlLLed clalm for 8s 790
only
(ll) WrlLe off 8s 300 as bad debLs and creaLe a provlslon for doubLful debLs
on debLors aL 3
(lll) uepreclaLe agenL's samples by 33
1/3

(lv) WrlLe off adverLlsemenL developmenL by 23


(v) Charge 3 manager's commlsslon on neL proflLs afLer charglng hls
commlsslon
(vl) roprleLor wlLhdrew 8s 100 for hls prlvaLe use 1hls amounL was
lncluded ln general expenses
(vll) 1here ls a conLlngenL llablllLy of 8s 4000 ln respecL of a courL case