Académique Documents
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Jerryland Lyngdoh
1 What are financial statements and how these are prepared from
trial balance?
A written report which quantitatively describes the financial health of a
company. This includes an income statement and a balance sheet, and often
also includes a cash flow statement. Financial statements are usually
compiled on a quarterly and annual basis.
The financial statement can be prepared by rearranging the items on the
worksheet. The income statement is typically prepared first and then the
balance sheet. The worksheet does not eliminate the need to journalize and
post the adjusting journal entries. This must still be done in order for the
information to enter the accounting system .Journalizing and posting the
adjusting journal entries will bring the ledger into agreement with the
adjusted trial balance amounts shown on the worksheet.
Trial balance is a statement which is prepared to check the
Arthematical accuracy of the accounts. It will be prepared with the help of
balances of different accounts in ledger. Or it can be prepared based on
following principle.
5.Explain meaning of non –trading organization? List out the non trading
concern?
Unlike a normal trading concern, non trading concerns like clubs, societies
and association are incorporated without the motive of making profits.
However, some clubs and societies which run bars or restaurant for the
convenient of the member on a permanent basis with the intention of profit
The following statement has been prepared for the XYZ Social Club:
Receipts and Payments Account for the year ended 30 April 2007
$ $
Balance at bank at 1 Payment for food
1,950 6,320
May 2006 and drink
Subscriptions 4,975 Wages 8,790
Cafeteria takings 11,860 New furniture 600
Receipt from members
10,900 Insurance 430
for trip to Bangkok
Annual social
Letting of club premises 3,100 760
expenses
Sale of tickets-annual Lighting and
720 510
social heating
Purchase of new
420
video machine
Publicity expenses 335
Expenditure for trip
10,650
to Bangkok
General Expenses 215
Repairs &
870
maintenance
Balance at bank at
3,605
30 April 2007
33,505 33,505
$
Club premises, valued at cost 32,000
Furniture 1,800
Equipment(including old video machine valued
860
at $40)
Stock of food and drink 1,800
Insurance prepaid 40
Creditors for food and drink 165
Lighting and heating accrued 130
Subscriptions: in arrears(paid in May 2006) 170
Subscription : in advance 120
During the year, the club wrote off the old video machine. Depreciation is calculated at 25% of the
book value of furniture and equipment at 30 April 2007. Charge 60% of wages to the cafeteria.