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8/19/2019 final acs - ppt IMT Chapter 7.ppt
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Chapter 18
Final Accounts –
withoutadjustments
ACCOUNTANC Class XI
8/19/2019 final acs - ppt IMT Chapter 7.ppt
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ACCOUNTANC
MEANING
EANING
☺ The financial statements are prepared to knowthe profit and loss and financial position of thebusiness.
A complete set of financial statements includes:
Balance Sheet
Trading and Profit and Loss Account (Income
statement
Schedules and !otes forming part of Balancesheet and Profit and Loss Account
8/19/2019 final acs - ppt IMT Chapter 7.ppt
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UE!
E!
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UE!
E!
In"estors: # The shareholders and the owners of the
business are interested to know the financial position$earning capacit% and profitabilit% of the business.
Potential In"estors: # The potential in"estors are
interested to know whether the in"estment will be safe ornot.
Lenders: # Lenders like debenture holders$ suppliers of
loans are interested in knowing the short term as well as
long term loan sol"enc% of the business.
&reditors:# The% are interested to know whether the firm
will be able to pa% off their debts when the% fall due
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'mplo%ees:# The emplo%ees can udge as how much
bonus and increase in wages is possible from the profits
of the firm
)o"ernment:# )o"ernment uses the financial statements
to stud% the profits and position of the industries so that
necessar% measures and policies can be framed
Ta*ation Authorities: # The% use the financial statementsfor the purpose of assessment of income ta*$ sales ta*
etc.
UE!
E!
8/19/2019 final acs - ppt IMT Chapter 7.ppt
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EX"EN#I$U!E
•
&APITAL '+P'!,IT-'
• '/'!-' '+P'!,IT-'
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CA"I$A% EX"EN#I$U!ECA"I$A% EX"EN#I$U!E
An% e*penditure which increases the "alue of the0i*ed Assets is termed as &apital '*penditure. It
includes ac1uisition and up gradation of the fi*ed
assets.
Examples of Capital Expenditure are:-
• The e*penditure incurred on ac1uisition of fi*ed
assets• '*penditure incurred in the installation or erection
of fi*ed assets
• '*penditure which increases the earning capacit%
of the fi*ed assets
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!E&ENUE
EX"EN#I$U!E
An% e*penditure which is incurred which gi"es thebenefit for the current %ear. This e*penditure is
shown in Income Statement and written off in the
same accounting period in which it is incurred
Examples of Revenue Expenditure:
• '*penses incurred for da% to da% running of the
business• '*penses incurred on ordinar% repairs and
maintenance
•
,epreciation on fi*ed Assets
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apital E'penditure ()s
!e(enue E'penditure
&apital '*penditure e"enue '*penditure
&apital '*penditure is incurred for the
ac1uisition and up gradation of the fi*ed
assets
e"enue '*penditure is incurred for the da% to
da% running of the business
&apital '*penditure is incurred for the
purpose of increasing the earning
capacit% of the business
e"enue '*penditure is incurred for the
purpose maintaining the earning capacit% of
the business
The capital e*penditure benefit is %ielded
o"er a long period of time
The re"enue e*penditure %ields benefit for the
current accounting period in which incurred
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IN *ME $A$EMEN$
Trading Account
→ Trading account is prepared for calculating the
gross profit or gross loss incurred as a result ofthe trading acti"ities of a business.
→Trading account records the amount of purchases
and the e*penses incurred directl% to bring it in
saleable state
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F*!MA$
Particulars Amount(s Particulars Amount (s
To 2pening Stock A3c
To Purchases A3c
Less: Purchase eturn A3c
To 4ages
To 4ages and salaries
To ,irect '*pensesTo &arriage Inward
To )as$ fuel and power
To 0reight$ octroi 5 cartage
To 6anufacturing e*penses
To 0actor% '*penses
To ,ock &harges
To Import dut%3&ustom ,ut%
To o%alt%
To )ross Profit
( Transferred to P5 L A3c
****
****
****
****
********
****
****
****
****
****
****
****
****
B% Sales A3c
Less: Sales return A3c
B% &losing Stock
B% )ross Loss
( Transferred to P5 L A3c
****
****
****
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P20IT A!, L2SS A&&2-!T→Profit and Loss Account discloses the !et Profit
and !et Loss which a firm has earned orincurred during the %ear. It actuall% takes into
account all the e*penses of the accountingperiod not taken in trading account.
→These e*penses include:
• Administrati"e e*penses
• Selling '*penses
• ,istribution '*penses
IN *ME $A$EMEN$
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F*!MA$
Particulars Amount Particulars Amount
To )ross Loss b3d
To 2ffice '*penses
To Selling and ,istribution
e*penses
To 6iscellaneous '*penses
To !et Profit Transferred to
capital A3c
****
****
****
****
****
B% )ross Profit b3d
B% Indirect Incomes
B% !et loss transferred to
capital A3c
****
****
****
Total Total
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"*I$I*N $A$EMEN$
BALA!&' S7''T
→A statement is prepared to know all the assets andliabilities of the business enterprise.
→ It is a statement at a particular date showing on one
side the assets and on the other side the liabilities ofthe business firm
→ It helps in ascertaining the financial position of the
firm
→ It gi"es an indication of whether the firm is sol"entor not.
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F*!MA$
Liabilities Amount Assets Amount
&apital
Add: !et profit
Less: ,rawings
Less: Income Ta*
Less: Life insurance Premium
eser"es
Long Term Loans
&urrent Liabilities ****
****
****
****
&urrent Assets
Long term In"estments
0i*ed Assets
****
****
****
Total Total
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+UE$I*N
PATI&-LAS A62-!T A62-!T
Purchases and Sales 89$999 $;
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4ages 9$999
&apital $@$9
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*%U$I*N
Particulars Amount Particulars Amount
To 2pening Stock A3c
To Purchases A3c 89$999
Less: eturns A3c $;
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*%U$I*N
Particulars Amount Particulars Amount
To ,iscount allowed A3c
To Bank &harges A3c
To Salaries A3c
To 0reight 2utward A3c
To ent$ ates and
Ta*es A3c
To Ad"ertisement A3c
To !et Profit transferred to
&apital A3c
@=9
99
;=
B% )ross Profit
B% ,iscount recei"ed A3c
=9$
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*%U$I*N
Liabilities Amount (s Assets Amount (s
&apital $@$9;=
&reditors
Bills Pa%able
$=;$999
;9$999
=$999
Plant and machiner%
,ebtors
&ash at Bank
&losing Stock
>9$999
?=$999