Advertisements
Advertisements
Question
State whether the following statement is True or False.
The Balance Sheet is a nominal account.
Options
True
False
Solution
False
Explanation: A Balance Sheet is a statement and not an account containing the summary of personal and real accounts. On the other hand, Trading and Profit & Loss Account is a nominal account.
APPEARS IN
RELATED QUESTIONS
Expenses which are paid before due.
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.
What is Final Accounts?
Answer the following question in one sentence.
What is Trial Balance?
Give the word / term or phrase which can substitute the following statement.
A statement showing financial position of the business on a particular date.
Give the word / term or phrase which can substitute the following statement.
The credit balance of Trading Account.
Select the most appropriate alternative from those given below and rewrite the statement.
All indirect expenses are 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.
To find out net profit or net loss of the business _________________ account is prepared.
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.
Trial Balance is the base of Final account.
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?
Closing stock is an item of ________.
Net profit of the business increases the ______.
Drawings appearing in the trial balance is ________.
Current assets does not include ______.
What are final accounts? What are its constituents?
Correct and Rewrite the following statement:
The balancing figure of the Trading Account is Net Profit or Net Loss.
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.
From the following Trial Balance of Nandini & Co. as of 31st March 2019. Prepare Final Accounts after considering the adjustments given below.
| Particulars | Debit Amount (₹) | Credit Amount (₹) |
| Loose Tools | 1,10,000 | |
| Furniture & Fixtures | 81,000 | |
| Bad debts | 1,400 | |
| Sundry Debtors | 81,600 | |
| Stock (31st March 2018) | 52,000 | |
| Purchases | 77,000 | |
| Sales Cash | 21,000 | |
| Sales Credit | 81,000 | |
| Returns | 400 | 600 |
| Advertisements | 4,800 | |
| Rate taxes & Insurances | 6,000 | |
| Repairs & maintenance | 1,200 | |
| Salaries (2/3rd for factory) | 18,000 | |
| Rent (Paid for 11 months) | 2,200 | |
| Machinery (Includes ₹ 24,000 | 84,000 | |
| purchased on 1st Oct. 2018) | ||
| Capital | 3,60,000 | |
| R.D.D. | 8,000 | |
| Sundry Creditors | 70,000 | |
| Drawings | 14,000 | |
| Interest | 1,200 | |
| Dividend | 2,800 | |
| Bank Balance | 40,000 | |
| Royalty | 6,000 | |
| 9% Bank loan (30th Sept 2018) | 40,000 | |
| Carriage Outwards | 4,000 | |
| Discount | 1,000 | |
| 5,84,600 | 5,84,600 |
Adjustments:
1. Closing stock valued at ₹ 1,00,000.
2. Write off ₹ 2,000 as bad debts and create a provision for doubtful debts @ 5% on Sundry Debtor.
3. Depreciate Machinery by 10% p.a. and Loose Tools is valued at ₹ 1,00,000.
4. Charge Interest on Capital @ 2% p.a.
Following are the closing ledger balances of Deepak & Co. Prepare Trading Account and Profit & Loss Account for the year ended 31st March 2019 and Balance sheet as of that date.
Ledger Balances of Mr. Deepak and Co. as of 31st March, 2019
| Particulars | Amount (₹) | Particulars | Amount (₹) |
| Bank | 30,000 | Capital | 1,20,000 |
| Bills Payable | 7,500 | Insurance Premium | 18,000 |
| Furniture | 19,500 | (1.1.2019 to 31.12.2019) | |
| Commission Received | 3,000 | Salaries | 30,000 |
| Stock (1.4.2018) | 27,000 | Bank loan | 30,000 |
| Building | 37,500 | Sundry expenses | 7,500 |
| Wages | 7,500 | Interest paid | 1,500 |
| Creditors | 37,500 | Machinery | 25,500 |
| Bad Debts | 4,500 | Sales | 96,000 |
| R.D.D. (old) | 3,000 | Purchases | 42,000 |
| Sales Returns | 1,500 | Debtors | 31,500 |
| Purchases returns | 3,000 | ||
| Cash in hand | 16,500 |
Adjustments:
1. Closing stock was valued at ₹ 60,000
2. An amount of ₹ 3,000 is still to be received on account of commission.
3. Provision for discount on debtors and Provision for discount on Creditors are to be created 2% and 3% respectively.
4. Amount of Furniture is to reduce by ₹ 4,500 and Building by 10%.
5. Outstanding expenses Salaries ₹ 4,500 and Wages ₹ 1,500.
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 Ayub & Co. as of 31st March 2019, 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 after making necessary adjustments.
Trial Balance as of 31st March 2019
| Debit balances | Amount (₹) | Credit Balances | Amount (₹) |
| Cash in hand | 4,575 | Discount | 900 |
| Cash at Bank | 15,450 | Loan from Abhay | 15,000 |
| Drawings | 18,000 | Creditors | 18,225 |
| Furniture | 6,000 | Sales | 1,95,000 |
| Plant & Machinery | 45,000 | Returns Outward | 3,000 |
| Opening Stock | 30,000 | Capital | 90,000 |
| Purchases | 1,20,000 | ||
| Salaries and Wages | 33,600 | ||
| Debtors | 30,600 | ||
| Returns Inward | 7,500 | ||
| Audit Fees | 2,250 | ||
| Rent. Rates and Taxes | 5,400 | ||
| Bad debts | 600 | ||
| Travelling Expenses | 750 | ||
| Insurance | 1,200 | ||
| Interest on Loan from Abhay | 450 | ||
| Trade Expenses | 300 | ||
| Sundry expenses | 450 | ||
| 3,22,125 | 3,22,125 |
Adjustments:
1. Stock on hand on 31st March 2019 valued at ₹ 60,000
2. Rent amounting to ₹ 600 Prepaid.
3. Bad Debts ₹ 600 and create a Provision for Doubtful Debts 5%
4. Depreciation on Plant & Machinery by 10% and Furniture is valued at ₹ 4,500
5. Outstanding Salaries ₹ 900
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%.
