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Question
State True or False.
Statement of profit is just like Profit and Loss Account.
Options
True
False
Solution
False
Explanation: Statement of Profit is not like Profit and Loss Account. It is calculated as shown:
Capital at the end
Add: Drawings made during the year
Less: Additional Capital introduced during the year
Less: Capital in the beginning
Profit or loss for the year
Profit and Loss Account consists of expenses incurred and income earned during the accounting period, whereas Statement of Profit or Loss is prepared to calculate the profit earned or loss suffered (using Opening and Closing Capital).
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RELATED QUESTIONS
A statement similar to balance sheet.
The capital in the beginning of the accounting year is ascertained by preparing ______________
(b) company
(c) society
(d) government
Mr. John keeps his books according to single entry system. Following are the details of his business:
| Particulars | 01.04.2012 Amount (Rs) |
31.03.2013 Amount (Rs) |
| Machinery | 70,000 | 70,000 |
| Furniture | 10,000 | 20,000 |
| Stock | 36,000 | 42,000 |
| Sundry debtors | 72,200 | 88,400 |
| Cash in hand | 3,000 | 4,100 |
| Cash at bank | 42,000 | 52,300 |
| Sundry creditors | 54,500 | 60,400 |
Additional information:
(1) Mr. John had introduced Rs. 20,000 as additional capital on 1st October, 2012.
(2) Mr. John had withdrawn Rs.15,000 for his personal use during the year.
(3) Additions to furniture were made on 1st October, 2012.
(4) Depreciate machinery at 10% p. a.and furniture at 20% p. a.
Prepare:
(1) Opening and Closing Statement of Affairs.
(2) Statement of Profit or Loss for the year ending on 31st March, 2013
Answer in one sentence only.
What is statement of affairs?
Answer in one sentence only.
Can a trial balance be prepared under Single Entry System?
Answer in one sentence only.
Which type of accounts are maintained under Single Entry System?
Answer in one sentence only.
Which Statement is prepared under the Single Entry System to ascertain profit?
Write the word / term / phrase which can substitute the following Statement.
A statement similar to Balance Sheet.
Write the word / term / phrase which can substitute the following Statement.
A statement similar to Balance Sheet prepared to ascertain the amount of closing capital.
Write the word / term / phrase which can substitute the following Statement.
A statement similar to Balance Sheet.
Write the word / term / phrase which can substitute the following Statement.
When Closing Capital is greater than Opening Capital it denotes ___________
Write the word / term / phrase which can substitute the following Statement.
Generally incompleted records are maintained by _____________
Select the most appropriate answer the alternatives given below and rewrite the Sentence.
The capital in the beginning of the accounting year is ascertained by preparing_____________.
Select the most appropriate answer the alternatives given below and rewrite the Sentence
The Capital balances are ascertained by preparing _______________.
State True or False.
Under Single Entry System it is not possible to prepare Trial Balance.
State True or False.
Under Single Entry System it is not possible to prepare Trial Balance.
Mrs. Sunita keeps her books on Single entry System and gives the following information:
| Particulars | 01.04.2015 Amount |
31.03.2016 Amount |
| Cash at bank | 10,000 | 64,000 |
| Debtors | 50,000 | 80,000 |
| Stock | 60,000 | 1,00,000 |
| Plant | 40,000 | 40,000 |
| Building | 1,00,000 | 1,00,000 |
| Bills payable | 10,000 | 10,000 |
| Creditors | 30,000 | 40,000 |
Additional Information:
Mrs. sunita withdrew from business Rs. 30,000 for personal use. She further introduced fresh capital of 50,000. Depreciation is to be charged @10% p.a on plant and building.
Prepare:
(a) Statement of Affairs as on 01.04.2015
(b) Statement of Affairs as on 31.03.2016
(c) Statement of Profit or Loss for the year ending 31.03.2016
