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CONTENTS
INTRODUCTION IMPORTANCE USERS TRADING ACCOUNT PROFIT & LOSS ACCOUNT BALANCE SHEET LIMITATIONS CONCLUSION
INTRODUCTION
Financial Statements may refer to any formal and original statements which disclose financial information relating to any business. Traditionally, the term Financial Statement is used to denote only two basic statements- TRADING and PROFIT & LOSS ACCOUNTS.
IMPORTANCE
12345KNOWING FINANCIAL POSITION MANAGEMENT DECISION MAKING USERS COMPARISION
USERS
TRADING ACCOUNT
TRADING A/C is one of the Financial Statement which shows the results of buying and selling of goods and services during a specified period.
FORMAT OF
TRADING ACCOUNT
for the year ending.
Dr.
Cr.
TO OPENING STOCK
TO PURCHASE
Less: RETURN OUTWARD
BY SALES
LESS: RETURN INWARDS
A Profit & Loss A/c is an account into which all gains and losses are collected in order to ascertain the excess of gains over the losses or vice versa.
FORMAT OF
Cr
TO SALARIES TO STATIONERY and PRINTING TO POSTAGE and TELEGRAMS TO AUDIT FEES TO LEGAL CHARGES TO TELEPHONE EXP. TO DEPRECIATION
BY DISC. RECEIVED BY COMMISSION EARNED. BY B/D RECOVERED BY DIVIDENDS BY INCOME from Other source BY NET LOSS (transfer to CAPITAL
A/C)
CONTD.
TO OFFICE EXP. TO GEN. EXP TO ADVERTISEMENT TO FREIGHT OUTWARD TO BAD DEBTS .TO NET PROFIT Transferred to
CAPITAL A/C
*EITHER NET
PROFIT/LOSS OR SHALL APPEAR.
BALANCE SHEET
A BALANCE SHEET is a screen picture of the financial position of a going business at a certain moment.
ASSETS
-CASH -BUILDING -LAND -MACHINE -GOODWILL -FURNITURE -MOBILE
LIABILITIES
- CREDITORS
- BANK OVERDRAFT - BILLS PAYABLE - LOANS
FORMAT OF
BALANCE SHEET
as at
. LIABILITIES CAPITAL:
OPENING BAL.
Add: NET PROFIT
Rs
LESS: DRAWING
GOODWILL LAND & BUILDING PLANT & MACHINERY FURNITURE INVESTMENT CLOSING STOCK DEBTORS BILLS RECEIVABLE CASH IN HAND CASH AT BANK -
ASSETS
Rs
LIMITATIONS
1234-
CONCLUSION
Financial statements are very important for any firm because they tell them how much they gained or loss at the end of an accounting period.
BIBLIOGRAPHY