Professional Documents
Culture Documents
To make accounting record of all the transaction from the very start of
business of Mr. Ram. To prepare profit and loss account of the business to ascertain
the new profit for the period. To prepare the balance sheet of the business to
ascertain the net profit for the period. To interpret the profitability and the financial
JOURNAL
Journal is a book of original entry in which the transactions are recorded first of
all as and when they take place. Transactions are originally recorded in a chronological order
FEATURES OF JOURNAL
A journal records both debit and credit aspects of a transaction according to the double
LEDGER
The ledger is the chief book of accounts, and it is in this book that all the business
transaction would ultimately find their place under their accounts in a duty classified manner.
RULE OF POSTING
The word To is used before the accounts which appear on the debit side of an account.
Similarly, the word By is used before the accounts which appear on the credit side of an
account.
If an account is debited in journal entry, the posting in the ledger should also be made on
Similarly, if an account has been posted on the credit side of an account should also be
TRIAL BALANCE
The trial balance is a statement preparation with the help of ledger balances, at the end of
financial year to find out whether debit total agrees with the credit total.
Trading and Profit and Loss accounts are the part of final accounts. It is also
Trading Account
Trading Account is prepared for calculating gross profit or gross loss arising or
an account into which all gains and losses are collected. In order to ascertain the excess
BALANCE SHEET
A balance sheet is a statement at a particular date showing on one side the trader
A balance sheet is a part of final accounts. This is the reason that trading
and profit and loss a/c and the balance sheet are called final accounts.
concept.
The total of the two sides of balance sheet must be equal. If the two sides
TRANSACTIONS
From the following transactions prepare Journal, Ledger and Trial Balance for the month
of March 2016. Also prepare Trading and P/L Account and Balance Sheet on the basis:-
Date Transaction
2016
CASH A/C
Dr Cr
29500 29500
PURCHASE A/C
Dr Cr
FURNITURE A/C
Dr Cr
5000 5000
SHYAM A/C
Dr Cr
SALES A/C
Dr Cr
CARTAGE A/C
Dr Cr
50 50
Apr 01 To Balance b/d
50
MOHAN A/C
Dr Cr
2500 2500
25000
Mar 31 By Balance b/d 25000
25000
10
DRAWINGS A/C
Dr Cr
SALARIES A/C
Dr Cr
STOCK A/C
Dr Cr
12
TRIAL BALANCE
Particulars Debit Credit
Cash 9500 -
Stock 5000 -
Capital - 25000
Purchases 10000 -
Shyam - 8000
Furniture 5000 -
Sales - 12000
Cartage 50 -
Mohan 2200 -
Drawing 5000 -
Salary 7500 -
13
31700 31700
7500 16650
To salary By Gross profit b/d
450
To office expenses
8700
To Net Profit
(Being added to Capital) 16650 16650
14
BALANCE SHEET
Particulars Amount Particulars Amount
Capital Fixed Asset
33700
41200 41200
15
CONCLUSION
The efficiency of this business is quite good since Gross Profit Ratio and Net Profit Ratio
are sufficiently, higher than the norms set for similar type of Business enterprises. There are not
REFERANCE
Wikipedia