📘 Financial Statements with Adjustments
1. Meaning of Final Accounts. (3 marks)
- Define final accounts.
- State the purpose.
- List components.
2. Objectives of Final Accounts. (3 marks)
- To know profit/loss
- Financial position
- Decision making
- Statutory compliance
3. Financial Statements to be prepared (Reason). (3 marks)
- Trading Account – gross profit
- Profit & Loss Account – net profit
- Balance Sheet – financial position
4. Journal entries & treatment in Trading/P&L and Balance Sheet. (5 marks)
- Closing stock, prepaid, outstanding
- Accrued income, income received in advance
- Bad debts, provision for bad debts, provision for discount
- Depreciation, manager’s commission
- Interest on drawings/capital, goods lost by fire
5. Difference between Trading and P&L Account (format/features). (3 marks)
Fill the table below (basis of difference):
| Basis | Trading Account | Profit & Loss Account |
|---|---|---|
| Purpose | ||
| Items included | ||
| Result | ||
| Balance |
6. Adjustments: Closing stock, depreciation, outstanding etc. Explain any two with treatment. (3 marks)
Question 7. Prepare Trading and Profit & Loss Account and Balance Sheet from the following Trial Balance as on 31st March, 2015. (10 marks)
| Debit Balances | ₹ | Credit Balances | ₹ |
|---|---|---|---|
| Opening Stock | 10,000 | Sales | 1,08,600 |
| Purchases | 65,000 | Return Out | 1,400 |
| Return Inward | 1,500 | Discount | 450 |
| Wages | 3,700 | Interest | 1,600 |
| Carriage Inward | 500 | Commission | 850 |
| Carriage Outward | 800 | Creditors | 15,000 |
| Trade Expenses | 600 | Bills Payable | 2,100 |
| Discount Allowed | 300 | Capital | 20,000 |
| Insurance Premium | 600 | ||
| Advertisement | 2,500 | ||
| Show-room Expenses | 1,200 | ||
| Machinery | 30,000 | ||
| Furniture | 17,000 | ||
| Debtors | 12,000 | ||
| Cash | 4,300 | ||
| Total | 1,50,000 | Total | 1,50,000 |
Adjustments:
- Closing stock = ₹15,000.
- Wages outstanding = ₹300 and insurance prepaid = ₹150.
- Commission received in advance = ₹200, while interest accrued is ₹400.
- Depreciate machinery by 10%.
Enter the final key figures:
Question 8. From the following particulars of Bimal, prepare Trading and Profit & Loss Account for the year ended 31st December, 2023 and Balance Sheet on that date. (10 marks)
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| Sundry Debtors | 5,20,000 | Sales | 29,20,000 |
| Cash in Hand | 23,900 | Creditors | 2,20,000 |
| Motorcar | 2,20,000 | Capital | 3,00,000 |
| Salaries | 84,200 | Provision for Doubtful Debts | 35,700 |
| Motorcar Expenses | 61,100 | ||
| Insurance Premium | 24,000 | ||
| Furniture | 35,000 | ||
| Purchases | 14,56,000 | ||
| Sales Return | 26,000 | ||
| Opening Stock | 1,14,000 | ||
| Rent, Rates & Taxes | 36,000 | ||
| Cash at Bank | 62,000 | ||
| Wages | 2,30,000 | ||
| Machinery | 2,40,000 | ||
| General Expenses | 26,800 | ||
| Carriage Outward | 16,300 | ||
| Carriage Inward | 20,400 | ||
| Fuel & Power | 2,00,000 | ||
| Drawings | 80,000 |
Additional Information:
- Closing Stock on 31.12.2023 was valued at ₹3,50,000.
- Goods worth ₹20,000 were distributed as free samples.
- Outstanding Salary = ₹28,000.
- Prepaid Insurance Premium = ₹6,000.
- Create provision for doubtful debts at 5% on Sundry Debtors.
- Depreciate Machinery and Furniture by 10% and Motorcar by 20%.
Enter the final key figures:
Answers are hidden before submission. After submit, each question shows your answer, correct answer & explanation.
Late night please tomorrow I attend the exams now very late please 🥺
Ok, Pabitra Sahu…Attend according to your convenience.
It’s not compulsory. It’s just a revision class test.