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प्रश्न
Select the most appropriate alternative from those given below and rewrite the statement.
To find out net profit or net loss of the business _________________ account is prepared.
पर्याय
trading
capital
current
profit and loss
उत्तर
To find out net profit or net loss of the business, Profit & Loss Account is prepared.
Explanation: The trading account only discloses the gross profit earned/loss incurred. But, a businessman is more interested in knowing the overall profit or loss of the business. So, a Profit and loss Account is prepared to ascertain the net profit earned or net loss incurred at the end of the accounting period.
APPEARS IN
संबंधित प्रश्न
What is bad debts?
Select the most appropriate alternative from those given below and rewrite the statement.
A_________________ is an intangible asset.
What is a Computer? Explain limitations of computerised accounting systems ?
Answer in one sentence only.
State the meaning of debit balance of Trading Account.
Answer in one sentence only.
What is Final Accounts?
Give the word / term or phrase which can substitute the following statement.
The transport expenses incurred to carry the goods purchased by the firm.
Give the word / term or phrase which can substitute the following statement.
Assets which are held in the business for a long period.
Select the most appropriate alternative from those given below and rewrite the statement.
Wages paid for installation of machinery should be debited to _________________ account.
Select the most appropriate alternative from those given below and rewrite the statement.
A statement showing financial position of the business is called as _________________.
Select the most appropriate alternative from those given below and rewrite the statement.
Trading account is prepared on the basis of __________________ expenses.
Select the most appropriate alternative from those given below and rewrite the statement.
Final accounts are prepared on the basis of _________________ and adjustments.
State whether the following statement is True or False.
Trading account is a nominal account.
State whether the following statement is True or False.
Partners must share profits and losses equally.
State whether the following statement is True or False.
Return Inward is deducted from purchases.
Give the word / term or phrase which can substitute the following statement.
An asset which can be converted into cash immidiately.
Answer in One Sentence:
What do you mean by Gross Profit?
Answer in One Sentence:
State the meaning of Accrued Income?
Balance sheet is ______.
What are final accounts? What are its constituents?
From the following Trial Balance of Sanjiv & Sons. Prepare Trading Account and Profit & Loss Account for the year ending on 31st March 2019 and a Balance Sheet as on that date.
| Particulars | Debit Amount (₹) | Credit Amount (₹) |
| Opening stock | 22,000 | |
| Purchases & Sales | 1,78,000 | 4,60,000 |
| Carriage Outward | 4,800 | |
| Plant and Machinery | 50,000 | |
| Debtors and Creditors | 44,000 | 76,000 |
| Returns | 2,000 | 4,000 |
| Buildings | 58,000 | |
| Motor Van | 40,000 | |
| Printing & Stationery | 3,000 | |
| Wages | 28,000 | |
| Reserved for Bad debts | 3,200 | |
| Commission | 2,400 | |
| Office expenses | 5,400 | |
| Carriage | 9,000 | |
| Furniture | 20,000 | |
| Premises | 81.000 | |
| Loose Tools | 20,400 | |
| Drawings | 24,700 | |
| Bank Overdraft | 22,000 | |
| Cash in hand | 71,000 | |
| Dividend | 3,300 | |
| Capital | 1,40,000 | |
| Salaries | 44,000 | |
| Bills Receivable & Bills Payable | 5,600 | 8,400 |
| Bad debts | 2,400 | |
| Advertisement (for 3 year) | 6,000 | |
| 7,19,300 | 7,19,300 |
Additional information:
- Closing stock on 31st March, 2019, was at cost ₹ 60,000 and Market Price ₹ 70,000.
- Outstanding expenses: Wages ₹ 4,000, Salary ₹ 2,400
- Provide depreciation at 10% on Motor Van and 5% on Furniture.
- Write off ₹ 2,000 for bad debts and create R.D.D. at 5% on debtors.
- Provide 10% p.a. interest on capital.
Following is the Trial Balance of Geeta Enterprises. You are required to prepare a Trading and Profit & Loss Account for the year ended 31st March 2019 and the Balance Sheet as of that date after taking into account the additional information provided to you.
Trial Balance as of 31st March, 2019
| Particulars | Debit Amount (₹) | Credit Amount (₹) |
| Capital A/c | 50,000 | |
| Drawings | 1,750 | |
| Opening Stock | 8,000 | |
| Purchases & Sales | 16,500 | 22,500 |
| Returns | 625 | 750 |
| Carriage Outward | 425 | |
| Wages - Productive | 1,000 | |
| Unproductive | 600 | |
| Salaries | 1,000 | |
| Travelling expenses | 1,125 | |
| Trade Expenses | 325 | |
| Fuel and Coal | 250 | |
| Discount | 460 | 550 |
| Sundry expenses | 225 | |
| Bad Debts | 200 | |
| Plant & Machinery | 20,000 | |
| Furniture | 5,500 | |
| Packing expenses | 175 | |
| Sundry Debtors & Creditors | 10,090 | 6,750 |
| Cash in hand | 2,200 | |
| Investments | 10,250 | |
| Reserve for Doubtful debts | 150 | |
| 80,700 | 80,700 |
Additional information:
1. Closing stock of goods on 31st March 2019 valued at ₹ 7,100 at cost price and ₹ 7,500/- as market price.
2. Travelling expenses include ₹ 125 spent on personal traveling.
3. ₹ 175 is to be written off as bad debts which were due from Mr. Ashok, a debtor, and 5% R.D.D. is to be maintained on debtors.
4. Reserve for discount on debtors as well as on creditors is to be maintained at 2% and 3% respectively.
5. Provide 10% depreciation on Plant & Machinery and Furniture.
Following is the Trial Balance extracted from the books of Raju Traders. You are required to prepare Trading A/c, Profit and Loss A/c for the year ending on 31st March 2019 and Balance Sheet as on that date after considering the additional information given below.
Trial Balance as of 31st March 2019
| Debit Balance | Amount (₹) | Credit Balance | Amount (₹) |
| Raju's Drawings | 5,000 | Capital | 2,00,000 |
| Opening stock | 30,000 | Sales | 1,64,000 |
| Wages | 5,000 | Returns outward | 2,400 |
| Purchases | 60,000 | Creditors | 40,000 |
| Trade Expenses | 800 | Discount | 1,600 |
| Royalties | 1,600 | Bills payable | 13,600 |
| Salaries | 20,000 | ||
| Debtors | 80,000 | ||
| Plant & Machinery | 56,000 | ||
| Printing & Stationery | 2,400 | ||
| Bad debts | 900 | ||
| Discount | 1,200 | ||
| Furniture | 16,000 | ||
| Advertisement | 3,000 | ||
| Carriage outwards | 600 | ||
| Computers | 1,20,000 | ||
| Bills Receivable | 16,000 | ||
| Cash in hand | 1,100 | ||
| Cash at Bank | 2,000 | ||
| 4,21,600 | 4,21,600 |
Adjustments:
- Closing stock is valued at ₹ 40,000 at Cost Price and ₹ 44,000 as Market Price.
- Provide Depreciation on Plant and Machinery, Furniture, Computers @ 5%, 10%, 15%, respectively.
- Salaries are paid for 10 months only.
- Further Bad debts amounted to ₹ 400 and provide 10% R.D.D. on Sundry Debtors.
- Advertisement is paid for 2 years.
From the following Trial Balance of Rajnish & Sons and the additional information given below prepare Trading & Profit and Loss Account for the year ending on 31st March 2018 and Balance Sheet as on that date.
Trial Balance as of 31st March 2018
| Debit balances | Amount (₹) | Credit Balances | Amount (₹) |
| Stock (01.04.2017) | 1,20,000 | Capital | 6,00,000 |
| Purchases | 4,00,000 | Sales | 3,00,000 |
| Wages | 17,000 | Return outward | 8,000 |
| Carriage | 6,000 | Sudnry Creditors | 1,80,000 |
| Salaries | 60,000 | Bills Payable | 90,000 |
| Rent, Rates and Taxes | 12,000 | 8% Loan (taken on 01.10.2017) | 1,00,000 |
| Insurance | 8,000 | Bank Overdraft | 79,200 |
| Royalties | 10,000 | ||
| Discount | 4,500 | ||
| Courier charges | 5,200 | ||
| Bad Debts | 7,000 | ||
| Trade Expenses | 2,500 | ||
| Drawings | 15,000 | ||
| Machinery | 3,00,000 | ||
| Furniture | 1,50,000 | ||
| Patents | 50,000 | ||
| Sundry Debtors. | 1,90,000 | ||
| 13,57,200 | 13,57,200 |
Adjustments:
1. Closing Stock valued at ₹ 3,00,000 cost price and ₹ 3,20,000 at Market price.
2. Salaries were paid for 10 months only.
3. Insurance is paid for one year ending on 30.06.2018
4. One of the debtors Mr. Amit became insolvent, from whom ₹ 10,000 was not received.
5. 5% R.D.D. is to be maintained on Debtors.
6. Depreciate Machinery & Furniture @ 10% and 5% respectively.
From the following Trial Balance of John & Sons, you are required to prepare Trading Account, Profit and Loss Account for the year ending 31st March 2019 and Balance Sheet as of that date.
Trial Balance as of 31st March 2019
| Debit balances | Amount (₹) | Credit Balances | Amount (₹) |
| Drawings (1st July 2018) | 12,000 | Sundry Creditors | 40,000 |
| Cash in hand | 8,000 | Returns | 4,500 |
| Cash at Bank | 20,000 | Dividend | 100 |
| Bills Receivable | 15,000 | Rent | 200 |
| Wages | 1,800 | Sales | 53,200 |
| Discount | 700 | Bank Loan | 5,000 |
| Rent | 2,000 | Capital | 99,700 |
| Advertisement | 3,000 | ||
| Bad debts | 1,200 | ||
| Travelling Expenses | 800 | ||
| Purchases | 40,000 | ||
| Machinery | 15,000 | ||
| Motor Car | 18,000 | ||
| Returns | 1,200 | ||
| Stock (1st April 2018) | 10,000 | ||
| Sundry Debtors | 35,000 | ||
| Carriage outwards | 1,000 | ||
| 6% Investment | 18,000 | ||
| (1st Sept 2018) | |||
| 2,02,700 | 2,02,700 |
Adjustments:
1. Closing Stock ₹ 27,000
2. Charge Depreciation on Machinery and Motor car @ 10% and 5% respectively.
3. Create R.D.D. 5% on Sundry Debtors
4. Interest on Drawings @ 5% p.a.
5. Create Discount on Sundry Creditors 3%
6. Advertisement ₹ 1,000 is prepaid.
7. Outstanding Rent ₹ 1,500
From the following Trial Balance of Jyoti, Trading Co. Prepare the Trading Account and Profit and Loss Account for the year ended 31st March 2019 and Balance Sheet as of that date.
Trial Balance as of 31st March 2019
| Debit balances | Amount (₹) | Credit Balances | Amount (₹) |
| Stock (1.4.2018) | 9,500 | Capital | 2,00,000 |
| Sales Returns | 750 | R.D.D. | 1,000 |
| Loose Tools | 55,000 | Sales | 38,750 |
| Debtors | 50,800 | Purchases return | 455 |
| Bills Receivable | 4,000 | Creditors | 47,000 |
| Purchases | 29,455 | Bills Payable | 8,000 |
| Furniture | 15,000 | Discount | 1,845 |
| Salaries | 5,000 | ||
| Carriage Outward | 3,000 | ||
| Legal expenses | 2,000 | ||
| Insurance | 2,200 | ||
| Goodwill | 20,000 | ||
| Machinery | 40,000 | ||
| Wages | 2,345 | ||
| Bank | 30,000 | ||
| Drawings | 8,000 | ||
| Investments | 20,000 | ||
| 2,97,050 | 2,97,050 |
Adjustments:
1. Closing stock valued at ₹ 58,000 Cost Price while the Market price is ₹ 60,000
2. Write off ₹ 1,200 as Bad debts and create provision for doubtful debts 2% on Sundry Debtors and also create provision for discount on Creditors 5%.
3. Loose Tools is valued at ₹ 52,000 and depreciate Furniture by 10% p.a.
4. Outstanding expenses Salary ₹ 1,000 and Wages ₹ 225
5. Charge interest on Capital 2% and on Drawings 10%.
From the following Trial Balance of Manish Enterprise, Prepare the Trading Account and Profit and Loss Account for the year ended 31st March 2019 and Balance sheet as of that date.
Trial Balance as of 31st March 2019
| Debit balances | Amount (₹) | Credit Balances | Amount (₹) |
| Cash in hand | 5,200 | Capital | 50,000 |
| Opening stock | 10,370 | Bank Loan | 15,000 |
| Goodwill | 10,000 | Bills Payable | 8,500 |
| Patents | 4,000 | Creditors | 38,260 |
| Cash at Bank | 4,400 | General Reserve | 1,500 |
| Freight | 2,500 | Dividend | 2,000 |
| Power & Fuel | 1,500 | Interest on Fixed Deposit | 3,440 |
| Furniture | 12,000 | Sales | 40,000 |
| Purchases | 35,260 | ||
| Mobile charges | 3,200 | ||
| Factory Salaries | 2,400 | ||
| Repairs | 800 | ||
| Lighting | 1,000 | ||
| Carriage outward | 360 | ||
| Professional charges | 1,240 | ||
| Debtors | 40,000 | ||
| Plant & Machinery | 13,700 | ||
| Office Equipments | 10,000 | ||
| Carriage Inwards | 770 | ||
| 1,58,700 | 1,58,700 |
Adjustments:
1. Closing Stock was ₹ 32,000.
2. Write off 50% of patents, depreciate Plant & Machinery by 10% p.a and Office Equipment by 20%.
3. Reserve for bad debts is to be created 5% and discount on Debtors 2%.
4. Outstanding expenses Mobile charges ₹ 300 and Freight ₹ 500
5. Charge Interest on Capital @ 5%.
6. Goods of ₹ 2,000 distributed on free samples.
