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प्रश्न
Distinguish between a Profit and Loss Account and a Balance Sheet.
उत्तर
| S. No. | Basis of Distinction | Profit and Loss Account | Balance Sheet |
| 1. | Purpose | It is prepared to ascertain the net profit or net loss. | It is prepared to know the financial position. |
| 2. | Period | It presents the results of business for a particular period, usually one year. | It is prepared at a particular date. |
| 3. | Nature | It is an account. | It is a statement. |
| 4. | Headings | Its two sides are called income and expenses. | Its two sides are called assets and liabilities. |
| 5. | Contents | It contains all the nominal accounts. | It contains all the real and personal accounts. |
| 6. | Difference | The difference in the totals of the two sides represents the net profit or net loss. | Its two sides are equal in total. |
| 7. | Effect on accounts | The accounts transferred to it are closed and no balance exists in these accounts. | The balances of accounts included in the balance sheet are brought forward in the next year. |
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संबंधित प्रश्न
What are the features of a Balance Sheet?
It is a financial statement which sets out the assets and liabilities of a trading or non-trading organisation as on a certain date.
______ is not an account but only a statement of assets and liabilities.
It helps the investor to know the earning capacity and financial health of the firm.
______ is a financial statement which sets out assets and liabilities as on a certain date.
Why is a Balance Sheet prepared?
Mr. Tate's financial position on 1 December, 2018 was as follows:
Stock ₹ 4,460; Debtors ₹ 890; Creditors ₹ 2 400; Cash ₹ 500; and Fixed assets ₹ 3,000.
- Draw up a statement to show his assets, liabilities and capital on 1.12.2018.
- During the month of December, 2018, the following transactions took place; Sold goods for cash ₹ 4.000; sold the balance goods on credit for ₹ 3 000; received ₹ 2 000 from debtors; paid ₹ 900 to creditors; withdrew ₹ 400 for personal use; allowed and accounted a direct payment of ₹ 500 by a debtor to one of the creditors.
Draw up a statement of his financial position at the end of the month of December 2018.
The following trial balance was extracted from the books of A. Harding, as on 31st March, 2019:
| Debit (₹) | Credit (₹) | |
| Capital | 20,100 | |
| Drawings | 1,500 | |
| Cash in Hand and at bank | 1,400 | |
| Petty Cash | 100 | |
| Cash Purchases and Sales | 10,000 | 20,000 |
| Credit Purchases and Sales | 12,000 | 25,000 |
| Returns | 2,000 | 1,000 |
| Discount | 400 | |
| Carriage Inwards | 500 | |
| Salaries | 6,000 | |
| Sundry and Petty Expenses | 1,200 | |
| Opening Stock | 5,000 | |
| Bad Debts | 600 | |
| Rent | 1,500 | |
| Machinery | 36,000 | |
| Furniture | 5,000 | |
| Debtors and Creditors | 5,000 | 10,000 |
| Stationary | 2,500 | |
| Commission | 200 | |
| Bank Loan | 14,400 | |
| 90,700 | 90,700 |
Prepare the complete set of final accounts for Mr. A. Harding, after incorporating the following adjustment:
- Closing stock is ₹ 26,000.
It is a statement of assets and liabilities. It is prepared to judge the financial position on a particular date.
The main use(s) of a Balance Sheet for a non-trading organisation is/are ______.
It is always prepared on a particular date.
It is not an account but a statement.
State any two uses of Balance Sheet.
Receipts and payments account serves as the basis for preparing the balance sheet of non-trading organisation.
Write a short note on Role of Balance Sheet in decision making.
