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प्रश्न
“Balance sheet is not an account” – Explain.
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उत्तर
- A balance sheet is a part of the final accounts. However, the balance sheet is a statement and not an account. It has no debt or credit sides and as such the words ‘To’ and ‘By’ are not used before the names of the accounts shown therein.
- A balance sheet is a summary of the personal and real accounts, which have balances. Personal and real accounts having debit balances are shown on the right-hand side known as the assets side, whereas personal and real accounts having credit balances are shown on the left-hand side known as the liabilities side.
- The totals of the two sides of the balance sheet must be equal. If the totals are not equal, it indicates the existence of the error. It must satisfy the accounting equation, i.e., Assets = Capital + Liabilities, following the dual aspect concept.
- The balance sheet is prepared on a particular date and not for a fixed period. It discloses the financial position of a business on a particular date. It gives the balances only for the date on which it is prepared.
- It shows the financial position of the business according to the going concern concept.
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संबंधित प्रश्न
Select the most appropriate alternatives given below and rewrite the sentence :
____________ is excess of assets over liabilities
Select the most appropriate alternatives given below and rewrite the sentence :
______________ is a statement which shows the financial position of business on a specific date.
Select the most appropriate alternatives given below and rewrite the sentence :
State True or False with reasons :
Every item of Trial Balance has only one effect.
State True or False with reasons :
Goodwill is not a fictitious asset
What are fixed assets?
Mention any two differences between trial balance and balance sheet.
What are the advantages of preparing a balance sheet?
Prepare trading and profit and loss account and balance sheet in the books of Deri, a trader, from the following balances as of March 31, 2018.
| Particulars | ₹ | Particulars | ₹ |
| Stock | 10,000 | Sales | 1,22,500 |
| Cash | 2,500 | Creditors | 5,000 |
| Bank | 5,000 | Bills payable | 2,000 |
| Freight inwards | 750 | Capital | 52,000 |
| Purchases | 95,000 | ||
| Drawings | 4,500 | ||
| Wages | 27,500 | ||
| Machinery | 50,000 | ||
| Debtors | 13,500 | ||
| Postage (office) | 150 | ||
| Sundry expenses | 850 | ||
| Rent paid | 2,500 | ||
| Furniture | 17,250 | ||
| 2,29,500 | 2,29,500 |
Closing stock (31st March, 2018) ₹ 8,000.
From the following Receipts and Payments account of Sivakasi Pensioner’s Recreation Club, prepare income and expenditure account for the year ended 31st March, 2018 and the balance sheet as on that date.
| Dr. | Receipts and Payments Account for the year ended 31st March, 2018 | Cr. | ||
| Receipts | ₹ | ₹ | Payments | ₹ |
| To balance b/d | By Rent and rates | 18,000 | ||
| Cash in hand | 10,000 | By Electricity charges | 17,000 | |
| Cash at bank | 20,000 | 30,000 | By Furniture purchased | 12,000 |
| To Subscription | By Billiards table purchased | 70,000 | ||
| 2016 – 2017 | 5,000 | By Repairs and renewals | 16,000 | |
| 2017 – 2018 | 25,000 | By Special dinner expenses | 4,000 | |
| 2018 – 2019 | 6,000 | 36,000 | By Special dinner expenses | 2,000 |
| To Legacies | 40,000 | By Balance c/d | ||
| To Rent from hall | 14,000 | Cash in hand | 1,000 | |
| To Lockers rent | 5,000 | |||
| To Collection for special dinner | 12,000 | |||
| To Balance c/d | ||||
| Bank overdraft | 3,000 | |||
| 1,40,000 | 1,40,000 | |||
Additional information:
- The club had 300 members each paying ₹ 100 as annual subscription.
- The club had furniture ₹ 10,000 on 1.4.2017.
- The subscription still due but not received for the year 2016 – 2017 is ₹ 1,000.
Following is the Receipts and payments account of Virudhunagar Volleyball Association for the year ended 31st December, 2018.
| Dr. | Receipts and Payments Account for the year ended 31st December, 2018 | Cr. | |||
| Receipts | ₹ | ₹ | Payments | ₹ | ₹ |
| To balance b/d | By Match expenses | 25,000 | |||
| Cash in hand | 5,000 | By Upkeep of pavilion | 17,000 | ||
| To Subscription | By Secretary’s honorarium | 18,000 | |||
| 2017 | 10,000 | By Bats and balls purchased | 22,000 | ||
| 2018 | 55,000 | By Grass seeds | 2,000 | ||
| 2019 | 5,000 | 70,000 | By Fixed deposit | 58,000 | |
| To Donations | 40,000 | By Sundry expenses | 3,000 | ||
| To Match fund receipts | 30,000 | By Balance c/d | |||
| To Interest on fixed deposit | 8,000 | Cash in hand | 7,000 | ||
| To Miscellaneous receipts | 5,000 | Cash at bank | 6,000 | 13,000 | |
| 1,58,000 | 1,58,000 | ||||
Additional information:
- On 1.1.2018, the association owned investments ₹ 10,000, premises and grounds ₹ 40,000, stock of bats and balls ₹ 5,000.
- Subscription ₹ 5,000 related to 2017 is still due.
- Subscription due for the year 2018, ₹ 6,000.
Prepare income and expenditure account for the year ended 31st December, 2018 and the balance sheet as on that date.
What is meant by Grouping and Marshalling of assets and liabilities? Explain the ways in which a balance sheet may be marshalled.
Calculate the amount of gross profit and operating profit on the basis of the following balances extracted from the books of M/s Rajiv & Sons for the year ended March 31, 2017.
| ₹ | |
| Opening stock | 50,000 |
| Net sales | 11,00,000 |
| Net purchases | 6,00,000 |
| Direct expenses | 60,0000 |
| Administration expenses | 45,000 |
| Selling and distribution expenses | 65,000 |
| Loss due to fire | 20,000 |
| Closing stock | 70,000 |
Calculate the amount of gross profit and operating profit on the basis of the following balances extracted from the books of M/s Rajiv & Sons for the year ended March 31, 2017.
| ₹ | |
| Opening stock | 50,000 |
| Net sales | 11,00,000 |
| Net purchases | 6,00,000 |
| Direct expenses | 45,000 |
| Administration expenses | 45,000 |
| Selling and distribution expenses | 65,000 |
| Loss due to fire | 20,000 |
| Closing stock | 70,000 |
Which section does NOT appear on a balance sheet?
What does it indicate if the balance sheet does not tally (totals on both sides are not equal)?
Why is the balance sheet prepared "as on" a date, not "for the year ended"?
Which statement best describes the relationship between assets and source of funds?
Which adjustment will affect both the Trading/Profit & Loss account and Balance Sheet?
