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Question
From the following information, prepare profit and loss account for the year ending 31st December, 2016.
| Particulars | ₹ | Particulars | ₹ |
| Gross loss | 60,000 | Printing and stationery (office) | 2,000 |
| Promotional expenses | 5,000 | Legal charges | 5,000 |
| Distribution expenses | 15,000 | Bad debts | 1,000 |
| Commission paid | 7,000 | Depreciation | 2,000 |
| Interest on loan paid | 5,000 | Rent received | 4,000 |
| Packing charges (on sales) | 4,000 | Loss by fire not covered by insurance | 3,000 |
| Dividend received | 3,000 |
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Solution
| Particulars | ₹ | Particulars | ₹ |
| To Gross loss b/d | 60,000 | By Dividend received | 3,000 |
| To Promotional expenses | 5,000 | By Rent received | 4,000 |
| To Distribution expenses | 15,000 | ||
| To Commission paid | 7,000 | ||
| To Interest on loan | 5,000 | By Net loss c/d | 1,02,000 |
| To Packing charges | 4,000 | ||
| To Legal charges | 5,000 | ||
| To Printing and stationery (office) | 2,000 | ||
| To Bad debts | 1,000 | ||
| To Depreciation | 2,000 | ||
| To Loss by fire | 3,000 | ||
| 1,09,000 | 1,09,000 |
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From the following details, prepare a profit and loss account.
| Particulars | ₹ | Particulars | ₹ |
| Gross profit | 50,000 | Interest received | 2,000 |
| Office rent | 10,000 | Discount received | 3,000 |
| Depreciation on office assets | 8,000 | Carriage outwards | 2,500 |
| Discount allowed | 12,000 | Insurance on office building | 3,500 |
| Advertisement | 4,000 | General expenses | 3,000 |
| Audit fees | 1,000 | Freight inwards | 1,000 |
Correct and Rewrite the following statement:
Capital A/c……………..Dr.
To Profit and Loss Account
(Being Net Profit transferred to Capital A/c)
Give a word, term or phrase which can substitute in the following statement:
Account prepared to know Net Profit or Net Loss.
Storage expenses, carriage outwards, salaries of sales staff are recorded on the ______ side of the ______.
Carriage outwards are recorded the ______ side of the ______.
Distinguish between a Trading Account and a Profit and Loss Account.
Where is “Discount allowed” shown in the Profit and Loss Account?
