TRADING-ACCOLNT

Jor thc year

Particulars

SIMPI.E FINAL ACCOT.NTS

OF M/S
o"-..::.:..

"ndi"g

To Opening Stock
purrchases

I,ess purchases retums (or Retums Cr. BaI) rlrpenses incurrcd in bringing rhe goods
(or Ketums outward)

" ,,

urerr present condilion and locarion : Wages, or

to

ManulacturingWages,

iiffi"T". $l;ff,;:,

Carriage Inwards, or Larrilrge on purchases

Lamage, or

,, &,:r"ttn, Inwards ; Lusloms Duty (Inwaray l** Charges

goods

on Irnpon"d

"

Motive power,

PROFIT AND LOSS ACCOIINT

for

the

yearllnlf-year ending ou...

Particulars 'l-o Gross

Palticulars
By Cross

Anrount
R:;

To

from trading Aic

Salarics

Loss

translerred

Rent, Ratcs and Taxes Stationery and Printiug Pcrstage and Tclegrams Audit Feei Legal Charges and Larv
Costs

;, Bad Debts Recovcreil

,, Discount (Cr.) ,, Conimission (Cr.) ,, Interest (Cr,)

,,

Rent from Tenants

irorn Trading Account

Profit translerred

,, Telephone Expenses ., Insurance Premiutn ,, Eatertainment Expenses ,, Repairs and Renervals ,, Dcpreciatir-rn of various
asSets

.,,
.,,

..

r,-.

Appreritice.;hip Plenr i iiil fnconre fi'ont Investurcrri Dividends on Shares

Di{l'erence

in

excirange

(cr.)

,, Misccllaricous
Cairrs
source

Rcvenue

,;, Establishnrent

,, Iitterest ,. Surtdly Trade Expcnses ,, C;rnveyance ,. Ch:rrity ,, Bank Charge ,, Oilice Expenses
Expenses

,. Iircolne fronr airy cther

,, Net Loss (tlanslerrecl

capital A
c)

to

,, Loss by
TI:eft

,, Otiice Lighting

,. Loss in Exchange ,, I icence Fec ,, Brokerage ,, Upkeep of Cars or Vans

F.ire,

,, General Expenses ,. Stablc Erpenses

Loss

by

,, Commission ,, Advertisement ,, Freight & Carriage ,, Packing Expenses ,, Travelling Expenses ,, Distributive Expenses ,, Bad Debts or Bad Debts uritten off ,,'}{et Frofit translerred to
Capital A/c
Rs.

,, Discount

,,

Outward Export Duty

It is desirable, - according. to mode'r thi'kin_e, that the profit alld Loss Account should be prepared in such i manner as will enable the reader fo form a correct idea about the profit earned or

S!MPLE FINAL ACCOUNTS BALANCE SHEET OF..........

as

10.26

at.,......,.........
Amount

Liabilities
Sunci:y or Trade Creditors Bills Fayable

Amount

Rs.

P. Cash in Hand Cash Cash at Bank

Rs.

P.

& Petty

Crrpit"al

Mortgage Reserve or Reserve Fund

Bank Overdraft Employees Provident Fund Loans (Cr.) -

Add Interest on Capital......

Bills Receivable .Sundry Debtors/Book Debts Loans (Dr.) Closing Stock Investnlents Furniture & Fittiner
Loose Tools Plant and Machinerv Horses and Carts :. Land and Buildings
Business Prenrises etc.

lda'Net Profit
Zc.ss

Drawings -T'ax

,, Income ,, Intereit

Drawings

on

Freeholdileasehold Land

,, Net Lo::s

Patents and Trade rnarks, Goodwill

which srrould be noted. These are the follorving : . (i) lt.is prepared at a particular date" rethcr on the closc ofthe day, and.not f'trr a pe'iod. Ir is true onry bLlpposs "n-triai;ot.;;;;;ri'rut.r. trie examp.le gir.,on above a pnrt {)l the goocls is sold orr '1 lst January, 1973. This rvill rrean thaithe value 6r tii. itn"t *irr bereduced, th-: cash in hand rvill increase arld tr.".apiioi *i[ utro increase by the p'ofit ear.ed ; if the tra'sactior is ai a rois the caprl"al
ilccount rvrll bc rcduccd.
s.heet is ., _(iilThe l",alance Accountpreparecl only after the preparation of rne I'ront a'ri Loss ; this is the reason why^ tire pr.ofit arid Loss Accorrrt 1i'clu,ling the Tracling Accou't) and ihe Bnla'cc ')neet .are togrihci' calle,l "finrl accounts". (o[ ccurse the Balarrcc )uccr rs not arl lccruitt ; the 1!vo sidcs are not the clcbit und tht.

The br'lance sheet rras certain charasteristics

,.ct'edit sidcs) \\/itho't being accompanied by rhe p.oni"o,ioro* Account the Bai^nc: shect riiil not be able io irr*r uJ.q.,ut! right .n the financial. p.sirion of rhe firm. For rhat p;p;r;;;;pp-re"ia_ tron of the profils ol the firm is trecessary.

since .the capital account will independently atrive at thisfigur-e, the trvr'r sicles of^the barance rh.;;-,;;;;"iuui tTr"'runr" ,, totals. If it is not, there is certainly un somewhere.

Sincc ,. , .,.(iiil and capital ilaDrttttes

always equals the difference

of

the assets ancr

"rro,