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    Finalaccounts 120907124506 Phpapp01

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    Aniket
    The document discusses final accounts, which are prepared at the end of the financial year and include the trading account, profit and loss account, and balance sheet. The trading account shows gross profit or loss and is prepared from items like opening stock, purchases, sales, and closing stock. The profit and loss account is prepared from the gross profit/loss and shows net profit or loss using items like expenses. The balance sheet shows the financial position on a date through assets like fixed assets and current assets, and liabilities like capital, creditors, and outstanding salaries. It balances when total assets equal total liabilities.

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    Finalaccounts 120907124506 Phpapp01

    Uploaded by

    Aniket
    89 views11 pages
    The document discusses final accounts, which are prepared at the end of the financial year and include the trading account, profit and loss account, and balance sheet. The trading account shows gross profit or loss and is prepared from items like opening stock, purchases, sales, and closing stock. The profit and loss account is prepared from the gross profit/loss and shows net profit or loss using items like expenses. The balance sheet shows the financial position on a date through assets like fixed assets and current assets, and liabilities like capital, creditors, and outstanding salaries. It balances when total assets equal total liabilities.

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    The document discusses final accounts, which are prepared at the end of the financial year and include the trading account, profit and loss account, and balance sheet. The trading account shows gross profit or loss and is prepared from items like opening stock, purchases, sales, and closing stock. The profit and loss account is prepared from the gross profit/loss and shows net profit or loss using items like expenses. The balance sheet shows the financial position on a date through assets like fixed assets and current assets, and liabilities like capital, creditors, and outstanding salaries. It balances when total assets equal total liabilities.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    89 views11 pages

    Finalaccounts 120907124506 Phpapp01

    Uploaded by

    Aniket
    The document discusses final accounts, which are prepared at the end of the financial year and include the trading account, profit and loss account, and balance sheet. The trading account shows gross profit or loss and is prepared from items like opening stock, purchases, sales, and closing stock. The profit and loss account is prepared from the gross profit/loss and shows net profit or loss using items like expenses. The balance sheet shows the financial position on a date through assets like fixed assets and current assets, and liabilities like capital, creditors, and outstanding salaries. It balances when total assets equal total liabilities.

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    of 11

    Meaning of Final Account:

    The accounts which are prepared at the end of the


    financial year are called as FINAL ACCOUNTS.

    Final Account consists of the following:-


    1)Trading account.
    2)Profit and Loss account.
    3)Balance sheet.
    Trading account is a nominal account.It is a part of Profit
    and Loss account.
    It is generally prepared to find the gross profit or gross
    loss of the business during the financial year.

    Explanation of some important points:


    1)Opening stock.
    2)Purchases.
    3)Purchase return.
    4)Wages.
    5)Sales.
    6)Sales return.
    7)Carriage inward.
    8)Royalty.
    9)Gross profit/loss.
    Profit and Loss account is open with either gross profit or gross
    loss b/d from trading account.
    It is prepared to find out net profit or net loss of the business.

    Explanation of some important points:


    1)Salaries. 6)Interest.

    2)Discount. 7)Bad debt.


    3)Travelling expenses. 8)Depreciation.

    4)Insurance. 9)Discount received.


    5)Printing and Stationary. 10)Net profit/loss.
    Balance sheet is a statement.It is not actually an
    account.It is a statement showing the financial
    position of the business on a particular date.It
    shows all the Assets and Liabilities of the
    business.It is the soul of the business.

    Asset side of the balance Liability side of the balance


    sheet sheet
    1)Fixed Assets. 1)Fixed liability.
    2)Current Assets. 2)Current liability.
    3)Fictitious Assets. 3)Contingent liability.
    Ex: Following is the trail balance of Ganesh and Shripad.
    Trial balance as on 31st march 2009
    Debit Balances Amount Credit Balances Amount
    Opening stock 44000 Reserve for doubtful debts 2100
    Building 80000 Sundry creditors 55400
    Patents 10000 Bills payable 10000
    Bills Receivable 28000 Sales 200000
    Purchases 130000 General reserve 28000
    Audit fees 6000 Capital account
    Bad debts 3500 Ganesh 70000
    Cash at bank 11500 Shripad 70000
    Travelling expenses 4200 Outstanding salaries 2700
    Wages and Salaries 12000
    Sundry debtors 52000
    Unproductive wages 1900
    Motor car 45000
    Trade expenses 2400
    General expenses 1800
    Rent(for 9 months) 4500
    discount 1400

    438200 438200
    1)Closing stock is valued at Rs.45000cost price
    And Rs.47000 market price.
    2)Bills receivable included a dishonoured bill of Rs.3000.
    3)Goods of Rs.2500 were taken by shripad,
    Goods worth Rs.4000 were sold on 27th march 2009,but no
    entry was made In the books of accounts.
    4)Write off Rs.2000 for bad debt and maintain R.D.D. at 5%
    on sundry debtors.
    5)Travelling expenses included personal travelling
    expensesRs.800 for mr.ganesh.
    6)Depreciation on building at 7.5 % p.a.
    Mrs.Ganesh & Shripad
    Trading Account
    For the year ended 31st march 2009

    Particulars Amt. Amt. Particulars Amt. Amt.


    To opening stock 44000 By sales 200000
    To purchases 130000 (+)unrecorded 4000 204000
    To Wages and sales
    salaries 12000 By goods taken
    To Trade for personal use-
    expenses 2400 shripad 2500
    To gross profit 63100 By closing stock 45000
    c/d

    251500 251500
    Particulars Amt. Amt. Particulars Amt. Amt.
    To audit fees 6000
    To Bad debts 3500 By Gross profit b/d 63100
    +New bad debts 2000
    +new R.D.D. 2850
    ↔↔↔
    8350
    -old R.D.D. 2100 6250
    To Discount 1400
    To dep.on Building 6000
    To general exp. 1800
    To unproductive
    wages 1900
    To travelling exp. 4200
    -personal 800 3400
    To rent 4500
    +o/s 1500 6000

    To net profit
    transferred to
    capital accounts
    Ganesh 15175
    Shripad 15175 30350

    63100 63100
    Liabilities Amt. Amt. Assets Amt. Amt.
    Capital accounts Building 80000
    Ganesh 70000 - depreciation 6000 74000
    +net profit 15175 Patents 10000
    ↔↔↔
    85175 Bills receivable 28000
    -drawings (personal 800 84375 - dishonor 3000 25000
    travelling)
    Shripad 70000 Cash at bank 11500
    + net profit 15175 Sundry debtors 52000
    ↔↔↔ + dishonored bill 3000
    85175 + unrecorded sales 4000
    - Drawings 2500 82675 ↔↔↔
    Sundry creditors 55400 59000
    Bills payable 10000 - New bad debts 2000
    General reserve 28000 - New R.D.D.5% 2850 54150
    O/s salaries 2700 Motor car 45000
    O/s Rent 1500
    Closing stock 45000

    264650 264650

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