Prepared by - Guman Singh Katuwal (MBS Account)

FINAL ACCOUNT
*Those types of account which are prepared at the end of
acounting/fiscal year in order to give a clear picture of the net profit earned
or loss incurred as well as financial position of the business are called the
final accounts. As their name imply, since there are specifically prepared
finally for the given year, these are called the final accounts.
* Final accounts refers to the set of accounts which is prepared at the
end of end accounting period in order to determine the actual amount of
gross profit/loss, net profit/loss as well as to show the true and fair financial
position of a business.
The main components of final accounts are as below;
1. Trading account
2. Profit and loss account
3. Profit and Loss appropriation account
4. Balance sheet
1. Trading account.
Trading accounts is the first step of final account of a company. It is
prepared by debiting all expenses relating to Production. All the Factory
Expenses are recorded in Debit side and Sales Revenue and Closing
stock (If given outside of Trail Balance) are recorded on credit side. The
balancing figure on debit side is known as Gross profit and on credit side
is known as Gross loss.
The following is the general format of trading account.
Trading Account of ..............................
the year ending ...............................
Particular Amount Particular Amount
To, Opening stock Xx By,Sales xx
-Raw materials xx Less- Sales return xx
-work in progress (stock) xx Less- Return inward xx xx
-Finish goods xx By, Closing stock
To, Purchase - Raw material
Less-Return xx - Work in progress xx
outward/purchase return - Finish goods xx
To, Carriage inward xx xx
To,Freight/purchase By, Gross loss (if)
expenses xx xx

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 Prepared by - Guman Singh Katuwal (MBS Account)

To,Directwages/productive xx
wages
To,Manufacturing expenses xx
To, Duty and clearing
charges xx
To, Royalties xx
To, Custom duty xx
To, Water supply xx
To, Excise duty xx
To, Store consumed xx
To, Power expenses xx
To, Coal, coke and oil xx
To, Factroy expenses xx
To, Work expences xx
To, Octroi xx
To, Heating and lighting
exp. xx
To, Cortage xx
To, Dock charge xx
To, Gross profit c/d (if) xx
Total Xxx Total xxx

2. Profit and loss account.

Profit and loss account is the second step of final account of company,
profit and loss account helps the firm know the profitability position of
the firm in term of net profit or net loss, the excess of credit side over the
debit is termed as net profit and vice versa is net loss. The profit or net
loss shown by this account is transfer to capital in balance sheet. The
following is the general formet of profit and loss account.
Profit and loss account of .........................
for the year ending ........................
Particular Amou Particular Amou
nt nt
To, Gross loss b/d (if) xxx By, Groff profit b/d (if) xxx
To, Salaries xxx By, Rent received xxx
To, Printing and stationery xxx By, Interest on investment xxx
To, Repair and maintenance xxx By, Divident received xxx

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 Prepared by - Guman Singh Katuwal (MBS Account)

To, Insurance premium xxx By, Transfer fee xxx

To, Office rent and rates xxx By, Profit on sales of fixed
To, Postage and telegram xxx assets xxx
To, General expenses xxx By, Commission received xxx
To, Electricity charges xxx By, Provision for doubtful xxx
To, Establishment expenses xxx debt(old) xxx
To, Audit fee xxx By, Discount on creditors
To, Director fees xxx By, Income from other
To, Interest on debenture and investment xxx
loans xxx By, Bad debt recovered xxx
To, Legal charges xxx By, Rent from propety xxx
To, Depreciation of fixed assets xxx By, Sundry receipts xxx
To, Bad debts xxx By, Apprentice premium xxx
To, Provision for bad debts By, Appreciation of fixed
(new) xxx assets xxx
To, Loss on sale of fixed assets xxx By, Discount received xxx
To, Discount on debtors xxx By, Net loss c/d (if) xxx
To, Advertisment xxx
To, Carriage outwards xxx
To, Employee benefits xxx
To, Packaging expenses xxx
To, Distribution expenses xxx
To, Export duty xxx
To, Commission allowed xxx
To, Prelimnary exp.written off xxx
To, Discount on issue of shares
written of xxx
To, Patent written off xxx
To, Trade mark written off xxx
To, Copy right written xxx
To, Goodwill written off xxx
To, Goods loss by fire xxx
To, Manager commission xxx
To, Bonous to employee xxx
To, Trade expenses xxx
To, Enertainment expenses xxx
To, Sales tax xxx
xxx
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 Prepared by - Guman Singh Katuwal (MBS Account)

To, Bank charges xxx

To, Donation and charity
To, Net profit c/d (if)
Total xxxx Total xxxx

3. Profit and loss appropriation account.

Profit and loss appropriation account is the third part of final account
of company. This account shows the distribution on net profit obtained
from profit and loss account. Profit and loss appropriation account is
prepared after the preparation of profit and loss account. While preparing
it, the operation result of the profit and loss account is transfered to this
account. The excess of credit side over debit side of this account is carry
forwarded to the liability side of the balance sheet under the heading
reserve and surplus. If debit side exceeds the credit side, the difference is
transferred to the asset side of the balance sheet under the heading
miscellaneous expenditure. The general format of the profit and loss
appropriation account is as under:

Profit and Loss Appropriation Account of .........................

For the year ending ........................
Dr. Cr.
Particular Amount Particular Amount
To,Balance b/d xxx By,Balance b/d (previous
To, Net loss b/d (current year) xxx year) xxx
To, General reserve (transfer) xxx By,Net profit b/d (current
To, Contingency reserve year) xxx
(transfer) xxx By,Provision for taxation xxx
To, Security fund (transfer) xxx By, General reserve
To, Dividend equalization fund (Withdraw from general xxx
(transfer) xxx reserve)
To, Interim dividend xxx By, Balance c/d (loss) xxx
To, Proposed dividend on :
Preference share xxx
Equity share xxx
To, Debenture redemption fund xxx
To, Stock dividend xxx

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 Prepared by - Guman Singh Katuwal (MBS Account)

To, Income tax (last year) xxx

To, Balance c/d (surplus) xxx
Total Xxxx Total xxxx

4. Balance sheet.
Balance sheet is the final part of the final account of a company. It is a
summarization statement of the financial position of the company. It is
also known as the statement of assets and liabilities because it is
prepared from the balnace of assets and liabilities extracted from the trial
balance of company for a period. The balance sheet of a company is
prepared after preparation of trading account, profit and loss account and
profit and loss appropriation account. The balance sheet of company can
be prepared in any of the following format:
➢ Horizontal format
➢ Vertical format
The format of balance sheet is given below
Balance Sheet of ........................
As on ............................
Liabilities Amount Assets Amount
Share capital Fixed Assets
Authorized share capita xxx Goodwill xxx
Issued, Subscribed and Patent right xxx
called upshare capital xx Trade marks xxx
Less:Calls in arrear xx xxx Copy right xxx
Shareforfeiture xxx Railways sidings xxx
Call advance xxx Development propety xxx
Reserve and surplus Plant and machinery xxx
Capital reserve xxx Lease hold property xxx
General reserve xxx Furniture and fitings xxx
Share premium xxx Livestock xxx
Debenture premium xxx Vehicles xxx
Capital redemption reserve xxx Land and building xxx
Sinking fund xxx Investment
Dividendequalization fund xxx Government or trust xxx
Other reserve fund xxx securities xxx
Profit and loss appro. xxx Government bonds xxx
account Investment in share xxx

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 Prepared by - Guman Singh Katuwal (MBS Account)

Secured & Unsecured loan xxx Investment in xxx

Debentures xxx deventures
Loan from bank xxx Investment in
Mortage loan xxx partnership firm
Long-term loan xxx Current assets and loan xxx
Other loans xxx & advance xxx
Bond xxx Interest accrued on xxx
Fixed deposit xxx investment xxx
Loan& advance form xxx Sundry debtors/Accont xxx
subsidies receivable xxx
Loan from others Cash in hand xxx
Current liabilities and xxx Cash at bank xxx
provisions xxx Stock in trade xxx
Sundry creditors xxx Work in progress xxx
Bills payable xxx Store and spare parts xxx
Outstanding expenses xxx Prepaid expenses xxx
Advance income xxx Advance tax payment xxx
Accounts payable xxx Bills of exchange
Unclaimed dividend xxx Bills receivable xxx
Other liabilities xxx Marketable securities xxx
Subsidiary companies xxx Loan & advance others xxx
Provision for taxation xxx Balance with customers xxx
Proposed divident xxx Miscellaneous xxx
Provision for expenditure
contingencies xxx Preliminary expensess xxx
Provision for insurance xxx Underwriting commission
Provision of provident Discount on issue of share
fund xxx Discount on issue of
Provision for employee debenture
benefits xx Loss on issue of debenture
Provision for pension Profit & loss
fund xx appro.account
Other provisions xx (Debit balance)

Total Xxx Total Xxx

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 Prepared by - Guman Singh Katuwal (MBS Account)

Adjustment:
The transactions which do not appear in tial balnce and given in
outside the trial balance are considered as adjuctment, they may have duel
effect. The adjustment transactions indicate such items of income and
expenses which relate to current year but have not yet brought in to the
book of account. Such transations are adjustment after the preparation of
trial balance. An adjustment item helps to ascertain true operating result
and final position of the business.
Effects of main adjustment are as below.

1. Closing stock.
Closing stock of adjustment is recorded in credit side of trading
account and assets side of balance sheet.
Trading account
Particular Amou Particular Amou
nt nt
xxx By, closing stock xxx

Balance sheet
Liabilities Amou Assets Amou
nt nt
xxx By, closing stock xxx

Note - If closing stock is given in trial balance it is recorded only in assets

side of balance sheet.

2. Outstanding expenses/expenses due/ expenses.

* First entry = added with the related topics of trading account or profit and
loss account (debit side)
* Second entry = Recorded in current liabilities of balance sheet.
Trading or / P/L account
Particular Amou Particular Amou
nt nt
To, .................... expenses

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 Prepared by - Guman Singh Katuwal (MBS Account)

xx Xxx
Add ...........outstanding exp.
Xx

Balance sheet
Liabilities Amou Assets Amou
nt nt
Outstanding expenses xxx

Note - If outstanding expenses is given trial balance it is recorded in

liabilities side of balance sheet only.

3. Prepaid expenses/paid in advance.

* First entry = Less with the related items of trading and P/L account of
debit sides.
* Second entry = Recorded in current assets of balance sheet.
Trading or / P/L account
Particular Amou Particular Amou
nt nt
To, .................... expenses
xx xxx
Less ...........prepaid exp.
Xx

Balance sheet
Liabilities Amou Assets Amou
nt nt
xxx Prepaid expenses xx
Note - If prepaid expenses is given in trial balance, it is recorded in assets
side of balance sheet.

4. Prepaid expenses expired

* First entry = Recorded in debit side of P/L account or Trading a/c.
* Second entry = Remaining unexpired expenses is recorded in assets
side of balance sheet.

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 Prepared by - Guman Singh Katuwal (MBS Account)

Note - Remaining unexpired expenses = prepaid expenses (TB) - prepaid

expenses expired (adjustment)

5. Accrued income/outstanding income.

That type of income which is earned but not received yet.
* First entry = Add with related items of P/L account in (credit side.)
* Second entry = Recorded in current assets of balance sheet
Profit and Loss a/c
Particular Amou Particular Amou
nt nt
By, ................... income
xx xxx
Add - accrued..........
xx

Balance sheet
Liabilities Amou Assets Amou
nt nt
Accrued income xx

Note - If accrued income is given in trial balance it is recorded in assets

side of B/S but accrued income is given in TB and accrued income received
is given in adjustment received cash is less with accursed income and add
with cash balance.

6. Advance income.
The income which is received before providing the goods or service.
* First entry = Less from related items of credit side of P/L account.
* Second entry = Recorded in current liabilities of balance sheet
Profit and Loss a/c
Particular Amou Particular Amou
nt nt
By, ................... income
xx xxx
Less - advance..........
xx

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 Prepared by - Guman Singh Katuwal (MBS Account)

Balance sheet
Liabilities Amou Assets Amou
nt nt
Advance income Xx

Note - If advance income is given in TB it is recorded in liabilities side of

balance sheet.

7. Advance income earned.

Advance income is converted in to income earned after providing the
service and goods . Advance income earned is given in adjustment which
is adjusted as below.
* First entry = Recorded credit side of P/L account.
* Second entry = Less with related items in liabilities side of balance
sheet

Profit and Loss a/c

Particular Amou Particular Amou
nt nt
By,................... income xxx
earned

Balance sheet
Liabilities Amou Assets Amou
nt nt
Unearned income
xx xx
Less - income earned
xx

8. Depreciation.
Reduction the value of fixed assets due to the wear and tear, passes of
time and other reason is called depreciation. Depreciation is adjusted as
below.

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 Prepared by - Guman Singh Katuwal (MBS Account)

* First entry = depreciation is adjusted in debit side of P/L account.

* Second entry = depreciation is less with related fixed assets in assets
side of balance sheet.

Profit and Loss a/c

Particular Amou Particular Amou
nt nt
To, depreciation on ............. a/c Xx

Balance sheet
Liabilities Amou Assets Amou
nt nt
Fixed assets
xx xxx
Less ; depreciation on ........
xx

9. Apprecition of fixed Assets.

If we get value of fixed assets is increased in the revaluation period is
called apreciation, which is adjusted as below.
* First entry = Recorded credit side of P/L account.
* Second entry = Add with related fixed assets in assets side of balance
sheet

Profit and Loss a/c

Particular Amou Particular Amou
nt nt
By, appreciation on xxx

Balance sheet
Liabilities Amou Assets Amou
nt nt
Fixed Assets
xx xx
Add - Appreciation on

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 Prepared by - Guman Singh Katuwal (MBS Account)

xx

10. Provision for doubtful debt.

Probable of not receiving the some amount from debtors or short term
investment is called doubtful debt and create the fund for maintaining
the doubtful debt is called provision for doubtful debt. It is adjusted as
below.
a) Provision for bad debt given in percentage.
It is calculated in amount, ( % percentage of debtors) and
adjusted as below.
* First entry = Recorded in debit side of P/L account.
* Second entry = Less with debtors in assets side of balance sheet.

Profit and Loss a/c

Particular Amou Particular Amou
nt nt
To, New rovision for bad debt Xx

Balance sheet
Liabilities Amou Assets Amou
nt nt
Debtors
xxx
Less, New provision per xx
bad debt xx

b) If further bad debt given in Rupees.

It is recorded in debit side of P/L account and less with debtors
in Assets side of Balance sheet.
Profit and Loss a/c
Particular Amou Particular Amou
nt nt
To, Further bad debt Xx
Balance sheet
Liabilities Amou Assets Amou
nt nt

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 Prepared by - Guman Singh Katuwal (MBS Account)

Debtors
xxx
Less - further bad debt xx xx

c) If further bad debt in rupees and new rovision for bad debt
(percentage) both are given.
At first calculate the new provision for bad debt as below.
New provision for bad debt = (debtore - further bad debt) x
% of new provision for bad debt.
* First entry = Further bad debt and new provision for bad debt both are
recorded in debit side of Profit and loss a/c.
* Second entry = Further bad debt and new provision for bad debt both
are deducted from debtors in assets side of balance sheet.
Profit and Loss a/c
Particular Amou Particular Amou
nt nt
To, Further bad debt Xx
To, Nw provision for bad debt Xx

Balance sheet
Liabilities Amou Assets Amou
nt nt
Debtors
xxx
Less - further bad debt xx
Less - new provision per xxx
bad debt xx

11. Provision for discount debtors.

Provision for discount to debtors, who pay early is created in the
current year itself. It is calculated as below.
Debtors xxx
Less - Further bad debt xx
Less - New provision for bad debt xx
Balance xx (x)
% of provision for discount on debtors xx .............% of Rs. x
Provision for discount on debtors xx

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 Prepared by - Guman Singh Katuwal (MBS Account)

* First entry = Recorded in debit side of P/L account.

* Second entry = Less from debtors.

Profit and Loss a/c

Particular Amou Particular Amou
nt nt
To, Provision for discount on Xx
debtors
Balance sheet
Liabilities Amou Assets Amou
nt nt
Debtors
xxx
Less, Provision for xx
discount on debtors xx

12. Provision for discount on creditors.

When business makes prompt payments of its debts. It may receive
discounts from its creditors is called provision for discount on creditors.
It is calculated as below.
• Provision for discount on creditors ................ % of creditors.
* First entry = Recorded in credit side of P/L account.
* Second entry = Less from creditors

Profit and Loss a/c

Particular Amou Particular Amou
nt nt
By, Provision for discount xxx
on creditors

Balance sheet
Liabilities Amou Assets Amou
nt nt
Creditors
xx

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 Prepared by - Guman Singh Katuwal (MBS Account)

Less, Provision for discount on xx

creditors xx

13. Interest on Capital.

The interest which incurred in owners capital is called interest on
capital. It is considered as expensed as business and adjusted as below.
* First entry = Debit side of P/L account.
* Second entry = Add with capital

Profit and Loss a/c

Particular Amou Particular Amou
nt nt
To, Interest on capital xxx

Balance sheet
Liabilities Amou Assets Amou
nt nt
Capital
xx
Add - Interest on Capital Xx
xx

14. Interest on drawing.

When owners drew a goods, cash and assets and other items for his
person use and he has to pay interest is called interest on drawings. It is
on income and treated as below.
* First entry = Recorded credit side of P/L account.
* Second entry = Less from capital along with drawings in liabilities side
of balance sheet.

Profit and Loss a/c

Particular Amou Particular Amou
nt nt
Xxx By, Interest on drawings

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 Prepared by - Guman Singh Katuwal (MBS Account)

Balance sheet
Liabilities Amou Assets Amou
nt nt
Captal
xx
Less - Drawigs
xx Xx
Less - interest on drawings
xx

15. Interest on Loan.

The interest on borrowing capital or debt capital is called interest on
loan. It is a expenses treated as below.
* First entry = Recorded debit side of P/L account.
* Second entry = Recorded in liabilities side of balance sheet.

Profit and Loss a/c

Particular Amou Particular Amou
nt nt
To, Interest on loan Xxx

Balance sheet
Liabilities Amou Assets Amou
nt nt
Outstanding interest on loan Xx

16. Interest on investment.

Interest received amount lending the outside of business is called
interest on investment. It is a income, which is adjusted as below.
* First entry = Recorded credit side of P/L account.

Profit and Loss a/c

Particular Amou Particular Amou

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 Prepared by - Guman Singh Katuwal (MBS Account)

nt nt
Xxx By, Interest on investment

* Second entry = Recorded in Assets side of balance sheet.

Balance sheet
Liabilities Amou Assets Amou
nt nt
Accured interest xx

17. Abnormal losses occur due to abnormal reasons like accident, fire,
flood etc is called abnormal loss of goods, which is adjusted as below.

* First entry = Toatal loss recorded in credit side of Trading account.

Dr. Trading A/C

Cr.
Particular Amou Particular Amou
nt nt
By, goods loss by ..........

* Second entry = Net loss recorded in debit side of Profit and loss A/C
* Net loss = Total loss - Compansatiion recived from insurance company
Profit & Loss A/C.
Profit and Loss a/c
Liabilities Amou Assets Amou
nt nt
To, Goods loss by ................ xxx

* Third Entry = Compensation received by insurnce company is

recorded in assets side of balance sheet.
Balance sheet
Liabilities Amou Assets Amou
nt nt
Insurance Company xx

18. Goods used by proprietor.

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 Prepared by - Guman Singh Katuwal (MBS Account)

Any trading goods drew from business by proprietor for personal use
is called goods used by proprietor. It is adjusted as below.

* First entry = Deducted from purchase in debit side of Trading account.

Dr. Trading A/C

Cr.
Particular Amou Particular Amou
nt nt
Purchase
xx Xxx
Less - Drawings of goods
xx

* Second entry = Deducted from capital in liabilities side of balance

sheet as drawings

Balance sheet
Liabilities Amou Assets Amou
nt nt
Capital xxx
xx
Less - Drawings of goods
xx

19. Goods distributed as free sample.

To promote the sales of its product the business organization may
distribute goods to public or consumer is called goods distributed as free
sample. Which is adjusted as below.

* First entry = Less from purchase in debit side of Trading account.

Dr. Trading A/C

Cr.
Particular Amou Particular Amou
nt nt
To, Purchase

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 Prepared by - Guman Singh Katuwal (MBS Account)

xx Xxx
Less - goods distributes as free
samples xx

* Second entry = Recorded in debit side of Profit & Loss A/C as

advertisement.
Profit & Loss A/C
Particular Amou Particular Amou
nt nt
To, advertisement Xx

• Calculation of Manager Commission.

1. Manager's commission is payable @ y% before drawing such
commission = profit before commission x y/100
2. Manager's commission is payable @ y% after dragging such
commission = profit before commission xy/100+y
Profit & Loss A/C
Particular Amou Particular Amou
nt nt
To, manager's commission Xx
payble

Balance sheet
Liabilities Amou Assets Amou
nt nt
Manager's commission payble xxx

Various information about Taxation.

S.N. Conditions First entry Second entry

1. If advance income tax paid is Assets side of Xxx
givent in Dr.side of trial balance sheet
balance
2. If last years tax paid is given in Dr.side of P/L Xxx
the Dr.side of trial balance appropriation a/c
3. If provision for taxation is Liabilities side of Xxx
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 Prepared by - Guman Singh Katuwal (MBS Account)

given in Cr.side of trial B/S

balance. (if tax paid is not
given)
4. If tax deducted at source is Liability side of Xxx
given in Cr.side of trial B/S
balance.
5. If tax paid is given in Dr.side Tax paid is Provision for
of trial balance & provision for shown on Dr.side taxation is shown
taxattion is given Cr.side of of P/L on Cr.side of P/L
trail balance appropriation a/c appropriation a/c
6. If provision for taxation is Dr.side of P/L Liability side of
given in additional a/c B/S
information.
7. If last years tax paid is given in
Dr.side of P/L Assets side of
adjustment appropriation a/c B/S (deducted
from cash/bank)
8. If provision for taxation is Dr.side of P/L Liability side of
given in Cr.side of trail balnce a/c (given in B/S (both
and in adjustment. adjustment) provision)

Various information about dividend.

Accounting Treatment

S.N. Conditions First entry Second entry

1. If provision for divident is Liability side of Xxx
given in Cr.side of trial B/S
balance.
2. If provision for dividend is Dr.side of P/L Liability side of
given in adjustment appropriation a/c B/S
3. If proposed dividend is given Dr.side of P/L Liability side of
in additional information. appropriation a/c B/S
4. If interim dividend is given in Dr.side of P/L Xxx
Dr.side of trial balance. appropriation a/c
5. If cash dividend paid is given Dr.side of P/L Assets side of
in adjustment appropriation a/c B/S (deducted
from cash/bank)
6. If stock dividend paid is given Dr.side of P/L Add with share

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 Prepared by - Guman Singh Katuwal (MBS Account)

in adjustment appropriation a/c share capital in

liability side of
B/S
7. If interim dividend is given in Dr.side of P/L Deduction from
adjustment appropriation a/c cash & bank in
the assets side of
B/S
8. If dividend declared including Dr.side of P/L Show by
interim dividend interim appropriation a/c deducting
dividend is given in both trial (total declared interim dividend
blance and additional amount) from declared
information. dividend in the
liability side of
B/S
9. If dividend paid is given in the Dr.side of P/L Xxx
Dr.side of trial balance. appropriation a/c
Summary Table of Adjustments.
S.N. Items Given in Trial Given in Adjustments
balance
1. Closing stock Asset side of i.Cr.side of Trading a/c
B/S ii.Asset side of B/S
2. Outstanding expenses Liabilities side i.Dr.side of Trading or
of B/S P/L a/c (added with
respective expenses head)
ii. Liabilities side of B/S
3. Prepaid / Advance Assets side of i. Dr.side of Trading or
expenses B/S P/La/c (deducted from
respective head)
ii. Assets side of B/S
4. Accrued / Outstanding Assets side of i.Cr.side of P/L a/c
Income B/S ii. Assets side of B/S
5. Advance / Unearned Liabilities side i.Cr.side of P/L a/c
income of B/S (deducted from related
income)
ii. Liabilities side of B/S
6. Depreciation of fixed Dr. side of P/L i.Dr.side of P/L a/c
assets a/c ii. Assets side of B/S

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 Prepared by - Guman Singh Katuwal (MBS Account)

(Deducted fromS the

related fixed assets)
7. Appreciation of fixed Cr. side of P/L i.Cr.side of P/L a/c
assets a/c ii. Assets side of B/S
(added with the related
fixed assets)
8. Amortization / written Dr. side of P/L i.Dr.side of P/L a/c
off of Intangible / a/c ii. Assets side of B/S
fictitious assets (deducted from related
assets)
9. Bad debts Dr. side of P/L i.Dr.side of P/L a/c
a/c ii. Assets side of B/S
(deducted form debtors)
10. Provision for doubtful Dr. side of P/L i.Dr.side of P/L a/c
debt a/c ii. Assets side of B/S
(deducted from debtors)
11. Provision for discount Dr. side of P/L i.Dr.side of P/L a/c
on debtors a/c ii. Assets side of B/S
(deducted from debtors)
12. Loss of goods & Dr. side of P/L i.Dr.side of Trading a/c
insurance claim a/c (deducted from purchase)
ii. Dr.side of P/L a/c
13. Goods lost by accident X i.Dr.side of Trading a/c
Insurance admit claim (deducted from purchase)
fully. ii. Assets side of B/S
(Insurance claim
receivable)
14. Goods lost by accident X i.Dr.side of P/L a/c (loss)
but insurance ii.Dr side of Trading a/c
company admitted (deducted from
claim partially purchases)
iii. Assets side of B/S
(Accrued interest on
investment)

15. Interest on loan Dr. side of P/L i.Dr.side of P/L a/c (loss)
a/c ii.Liabilities side of B/S

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 Prepared by - Guman Singh Katuwal (MBS Account)

16. Interest on Dr. side of P/L i. Cr.side of P/L a/c

investments a/c ii.Assets side of B/S
(Accrued interest on
Investment)

17. Drawing in cash Deducted from i.Deducted from cash or

capital in B/S bank balance in B/S
ii.Deducted from capital
in B/S
18. Drawing in goods Deducted from i.Deducted from purchase
capital in B/S in Trading a/c
ii.Deducted from Capital
in B/S
19. Manager's commission Dr. side of P/L i.Dr.side of P/L a/c
a/c ii.Liabilities side of B/S
(commission due to
manager)
20. Goods distributed as Dr. side of P/L i.Dr.side of Trading a/c
free sample a/c (deducted from purchase)
(advertisement ii.Dr/side of P/L a/c
expenses) (advertisement
expensess)
21. Transfer to reserve and Liabilities side i.Dr.side of P/L
fund of B/S (Reserve Appropriossion a/c
and Surplus) ii. Liabilities side of B/S
( Reserve and Surplus)
22. Bonus to employee Dr. side of P/L i.Dr.side of P/L a/c
a/c ii. Liabilities side of B/S
(current liabilities)

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