From the following balances, prepare Trading and Profit and Loss Account and Balance Sheet:
Debit Balances:
₹
Debit Balances (Contd.):
₹
Machinery
3,50,000
Rent
45,000
Debtors
2,70,000
Sundry Expenses
20,000
Drawings
90,000
Carriage
15,000
Purchases
9,50,000
Credit Balances:
Wages
5,00,000
Capital
10,00,000
Bank
1,50,000
Creditors
1,40,000
Opening Stock
2,00,000
Sales
14,50,000
Closing Stock was valued at ₹ 30,000.
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Q
4
If opening stock is 10,000, Purchases 20,000 , Direct expenses 10,000 , Indirect expenses 30,000. Find the value of cost of goods sold?
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Q
5
The following is the Trial Balance of Mr. Deepak as on March 31, 2017. You are required to prepare trading account, profit and loss account and a balance sheet as on date:
False. opening stock, purchases and direct expenses
direct expenses
Direct expenses means all expenses directly connected with the manufacture, purchase of goods, and bringing them to the point of sale. Direct expenses include carriage inwards, freight inwards, wages, factory lighting, coal, water and fuel, royalty on production, etc.
In a trading account, a credit balance signifies available funds for investing or purchasing securities. It factors in money deposited, and profits from sold securities.
In Trading and Profit and Loss account, opening stock appears on the debit side because it forms the part of the cost of sales for the current accounting year.
All direct expenses are shown on the debit side of the trading account and all indirect expenses are shown on the debit side of the profit and loss account.
1-General Parlance: Opening Stock is assumed to be that part of the stock which will be sold in the current year along with the new purchases. This means it is a kind of expense being incurred in the current year.
It shows the gross profit of business activities during a specific period. It is a part of the final accounts of the entity. In other words, the trading account gives details of total sales, total purchases and direct expenses relating to purchase and sales.
In the General Ledger, always follow the double-entry principle. Bank is an asset that decreases and is thus credited. Trading Stock is an asset that increases and is thus debited.
Direct expenses means all expenses directly connected with the manufacture, purchase of goods, and bringing them to the point of sale. Direct expenses include carriage inwards, freight inwards, wages, factory lighting, coal, water and fuel, royalty on production, etc.
Trading and Profit and Loss account is also an account with Debit and Credit sides. It can be observed that debit balances (representing expenses) and losses are transferred to the debit side of the Trading and a Profit and Loss account and credit balance (representing revenues/gains) are transfered to its credit side.
You own the money and investments in your brokerage account and can sell investments anytime. The broker holds your account and acts as a middleman between you and the investments you want to buy.
Opening stock a/c always shows a debit balance so it is shown on the debit side of trial balance . 6 . Generally closing stock(inventory ) does not appear in the trial balance , it is usually given as an additional information or adjustment outside the trial balance .
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