Financial statements are prepared to ascertain the profit or loss of the business, and to know the financial position of the company.
Trading, profit & Loss accounts ascertain the net profit for an accounting period and balance sheet reflects the position of the business.
All the above has almost a fixed format, just put all the balances of ledger accounts into the format given below with the help of the trial balance. With that, we may derive desired results in the shape of financial equations.
|
Trading & Profit & Loss Account of M/s ABC Limited For the period ending 31-03-2014 |
|||
|
Particulars |
Amount |
Particulars |
Amount |
|
To Opening Stock |
XX |
By Sales |
XX |
|
To Purchases |
XX |
By Closing Stock |
XX |
|
To Freight charges |
XX |
By Gross Loss c/d |
XXX |
|
To Direct Expenses |
XX |
|
|
|
To Gross Profit c/d |
XXX |
|
|
|
Total |
XXXX |
Total |
XXXX |
|
|
|
|
|
|
To Salaries |
XX |
By Gross Profit b/d |
XXX |
|
To Rent |
XX |
|
|
|
To Office Expenses |
XX |
By Bank Interest received |
XX |
|
To Bank charges |
XX |
By Discount |
XX |
|
To Bank Interest |
XX |
By Commission Income |
XX |
|
To Electricity Expenses |
XX |
By Net Loss transfer to Balance sheet |
XX |
|
To Staff Welfare Expenses |
XX |
|
|
|
To Audit Fees |
XX |
|
|
|
To Repair & Renewal |
XX |
|
|
|
To Commission |
XX |
|
|
|
To Sundry Expenses |
XX |
|
|
|
To Depreciation |
XX |
|
|
|
To Net Profit transfer to Balance sheet |
XX |
|
|
|
Total |
XXXX |
Total |
XXXX |
|
Balance sheet of M/s ABC Limited as on 31-03-2014 |
|||
|
Liabilities |
Amount |
Assets |
Amount |
|
CapitalXX Add:Net ProfitXX |
XX |
Fixed AssetsXXXX Less:DescriptionXX |
XX |
|
Bank Borrowings |
XX |
Current Assets - |
|
|
Long Term Borrowing |
XX |
Stock |
XX |
|
Current Liabilities - |
|
Debtors |
XX |
|
Advance Form Customers |
XX |
Cash In hand |
XX |
|
Sundry creditors |
XXX |
Cash at Bank |
XX |
|
Bills Payable |
|
Bills receivables |
XX |
|
Expenses Payable |
|
|
|
|
Total |
XXXX |
Total |
XXXX |