final acs - ppt imt chapter 7.ppt

8/19/2019 final acs - ppt IMT Chapter 7.ppt

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Chapter 18

Final Accounts –

withoutadjustments

ACCOUNTANC Class XI


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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


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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!


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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


To 2pening Stock A3c

To Purchases A3c 89$999

Less: eturns A3c $;


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*%U$I*N


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

final acs - ppt imt chapter 7.ppt

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