Final accounts

1. SHANKARLAL KHANDELWAL COLLEGE GODBOLE PLOTS, DABKI ROAD,AKOLA. SUB :- BOOK KEEPING AND ACCOUNTANCY TOPIC: - “FINAL ACCOUNTS” Submitted to:- Presented by:- SMITA TOSHNIWAL Abhishek Agrawal Nikhil Sharma (BBA 1 st YEAR)

2. Meaning of F inal A ccount : The accounts which are prepared at the end of the financial year are called as FINAL ACCOUNTS. Final Account consists of the following:- 1)Trading account. 2)Profit and Loss account. 3)Balance sheet.

3. Trading account is a nominal account.It is a part of Profit and Loss account. It is generally prepared to find the gross profit or gross loss of the business during the financial year. Explanation of some important points: 1)Opening stock. 2)Purchases. 3)Purchase return. 4)Wages. 5)Sales. 6)Sales return. 7)Carriage inward. 8)Royalty. 9)Gross profit/loss. Meaning of Trading Account:

4. Profit and Loss account is open with either gross profit or gross loss b/d from trading account. It is prepared to find out net profit or net loss of the business. Explanation of some important points: Meaning of Profit and Loss Account: 1)Salaries. 6)Interest. 2)Discount. 7)Bad debt. 3)Travelling expenses. 8)Depreciation. 4)Insurance. 9)Discount received. 5)Printing and Stationary. 10)Net profit/loss.

5. Balance sheet is a statement.It is not actually an account.It is a statement showing the financial position of the business on a particular date.It shows all the Assets and Liabilities of the business.It is the soul of the business. Meaning of Balance sheet: Asset side of the balance sheet Liability side of the balance sheet 1)Fixed Assets. 1)Fixed liability. 2)Current Assets. 2)Current liability. 3)Fictitious Assets. 3)Contingent liability.

6. Debit Balances Amount Credit Balances Amount Opening stock Building Patents Bills Receivable Purchases Audit fees Bad debts Cash at bank Travelling expenses Wages and Salaries Sundry debtors Unproductive wages Motor car Trade expenses General expenses Rent(for 9 months) discount 44000 80000 10000 28000 130000 6000 3500 11500 4200 12000 52000 1900 45000 2400 1800 4500 1400 Reserve for doubtful debts Sundry creditors Bills payable Sales General reserve Capital account Ganesh Shripad Outstanding salaries 2100 55400 10000 200000 28000 70000 70000 2700 438200 438200 Ex: Following is the trail balance of Ganesh and Shripad . Trial balance as on 31 st march 2009

7. 1) Closing stock is valued at Rs.45000cost price And Rs.47000 market price. 2) Bills receivable included a dishonoured bill of Rs.3000. 3) Goods of Rs.2500 were taken by shripad , Goods worth Rs.4000 were sold on 27 th march 2009,but no entry was made In the books of accounts. 4) Write off Rs.2000 for bad debt and maintain R.D.D. at 5% on sundry debtors. 5) Travelling expenses included personal travelling expensesRs.800 for mr.ganesh . 6) Depreciation on building at 7.5 % p.a. Adjustments

8. Particulars Amt. Amt. Particulars Amt. Amt. To opening stock To purchases To Wages and salaries To Trade expenses To gross profit c/d 44000 130000 12000 2400 63100 By sales (+)unrecorded sales By goods taken for personal use- shripad By closing stock 200000 4000 204000 2500 45000 251500 251500 Mrs.Ganesh & Shripad Trading Account For the year ended 31 st march 2009

9. Profit and Loss account Particulars Amt. Amt. Particulars Amt. Amt. To audit fees To Bad debts +New bad debts +new R.D.D. -old R.D.D. To Discount To dep.on Building To general exp. To unproductive wages To travelling exp. -personal To rent +o/s To net profit transferred to capital accounts Ganesh Shripad 3500 2000 2850 ↔↔↔ 8350 2100 4200 800 4500 1500 15175 15175 6000 6250 1400 6000 1800 1900 3400 6000 30350 By Gross profit b/d 63100 63100 63100

10. Balance sheet As on 31 st March2009 Liabilities Amt. Amt. Assets Amt. Amt. Capital accounts Ganesh +net profit -drawings (personal travelling) Shripad + net profit - Drawings Sundry creditors Bills payable General reserve O/s salaries O/s Rent 70000 15175 ↔↔↔ 85175 800 70000 15175 ↔↔↔ 85175 2500 84375 82675 55400 10000 28000 2700 1500 Building - depreciation Patents Bills receivable - dishonor Cash at bank Sundry debtors + dishonored bill + unrecorded sales New bad debts New R.D.D.5% Motor car Closing stock 80000 6000 28000 3000 52000 3000 4000 ↔↔↔ 59000 2000 2850 74000 10000 25000 11500 54150 45000 45000 264650 264650

11. THANKING YOU