Goyal Brothers Prakashan solutions for Commercial Studies [English] Class 10 ICSE chapter 7 - Final Accounts of Sole Proprietorship [Latest edition]

It is an account prepared to ascertain the gross profit/loss. It is a nominal account and represents the first stage of final accounts of a trading organisation.

A ______ is a statement of assets and liabilities at the end of the period. It shows the financial position of a business on a certain date and represents the third and final stage.

Assets and liabilities in the ______ can be arranged either in order of liquidity or in order of permanence.

______ provides information about the net profit earned or net loss suffered by the business during a given accounting period.

______ purpose is to show the financial position of the business while purpose of ______ is to establish the arithmetical accuracy of the books of accounts.

Identify the account on the basis of the given information.

1. It contains items of both revenue and expense nature.
2. It is prepared to ascertain the overall financial position of a business.

Net profit/loss is transferred from ______.

Abnormal Losses such as stock destroyed by fire, goods lost intransit, loss on sale of fixed assets are recorded on the ______ side of the ______.

Office rent, office lighting, office salaries, insurance, postage and telegrams, stationery and printing, audit fees, legal expenses are recorded on the ______ side of the ______.

What will be the accounting treatment of a dividend received in the books of accounts?

Wages, carriage inward are recorded on the ______ side of the ______.

Sales are recorded on the ______ side of the ______.

Purchases are recorded the ______ side of the ______.

Carriage outwards are recorded the ______ side of the ______.

Closing stock is on the credit side of the ______ and also in ______.

Opening stock is the first item on the ______ side of ______.

The difference of the two sides of this account is either net profit or net loss.

In case, the total of the debit side is greater than the total of the credit side, the difference represents ______.

On the basis of the information given, identify the account.

1. It contains items of expenditure nature only.
2. It is prepared to ascertion the Net profit or the Net Loss.

______ is not an account but only a statement of assets and liabilities.

The excess of assets over liabilities represents the ______ of the owner.

______ is prepared to know the financial position where as ______ is prepared to ascertain the net profit or net loss.

Imagine you are an accountant of ABC Industries. You have to pass an entry of discount allowed by the company. What will be the accounting treatment?

______ is a financial statement which sets out assets and liabilities as on a certain date.

On the basis of the information given, identify the account.

1. It contains items of revenue nature only.
2. It is prepared to ascertain the Gross profit or the Gross loss.

Imagine you are an accountant of Shah & Company. You have to pass an entry of interest received by the company. What will be the accounting treatment?

ASSERTION: Trading Account may be defined as an account which is prepared to ascertain the gross profit or gross loss of a business concern for a given time period.

REASONING: Trading Account contains items of capital nature only.

Which of the following is not posted Trading Account?

1. Carriage inward
2. Factory rent and rates
3. Royalty on production
4. Postage and Telegrams

The reason of preparing Profit and Loss Account is ______.

Which of the following is NOT an item of profit and loss account?

Mr. Emmanuel paid wages to the workers. The entry of this transaction will be shown in Trading account.

Imagine there is a Net loss in the business. Net loss is transferred from the ______ to ______.

The difference of the two sides of trading account is either net profit or net loss.

Return inward is posted in ______.

Observe the image and state the account where this expense will be shown.

Observe the given image and state the account where this item will be posted.

Closing Stock is an adjustment posted on the credit side of trading account and it appears as an asset in the Balance Sheet.

Balance Sheet is called Balance Sheet because it is a sheet of those ledger accounts which have not been closed by transferring to Trading Account and Profit and Loss Account.

Observe the image and state the account in which it will be posted.

ASSERTION: A Balance Sheet is a very important financial statement for owners, creditors and other users of accounting information.

REASONING: Analysis of the Balance Sheet in the form of financial ratios can provide valuable information about the financial strength and repaying capacity of the firm. Such information is very helpful to investors and creditors for taking right decisions.

Trading account is not a nominal account.

Observe the image and state in which will this item be posted?

ASSERTION: The words “as on” have a lot of significance in the Balance Sheet.

REASONING: Even a single transaction will make a difference in its contents.

Which of the following is true regarding Trading Account?

1. It shows the financial position of a concern on a particular date to the owners as well as to outsiders.
2. Provides information about the gross profit earned or gross loss suffered by the business during a given accounting period.
3. Analysis of the Balance Sheet in the form of financial ratios can provide valuable information about the financial strength and repaying capacity of the firm.
4. It helps the investor to know the earning capacity and financial health of the firm.

Which of the following are true for a Trading Account?

1. This account contains personal and real accounts only.
2. This account contains opening balance of stock on the debit side.
3. It is prepared after the Profit and Loss Account.
4. The result of this account is the Gross Profit or the Gross Loss.

The accountant of Gupta & Co. Ltd. has to pass an entry for Carriage Inwards. Where would he post the entry?

With regards to a Balance Sheet, identify which of the following statements are true:

1. It is made on a particular date.
2. It calculates the Net Profit or Net Loss.
3. It is a statement of Assets and Liabilities.
4. Debit side records expenses and credit side records income.

Answer in One Sentence:

What is a Trading A/c?

Why is a Trading Account prepared?

Answer in One Sentence:

What do you mean by Profit & Loss A/c?

What is the purpose of a Profit and Loss Account?

What is a Balance Sheet?

Why is a Balance Sheet prepared?

Distinguish between liquidity preference and permanence preference.

What are liquid assets?

What are contingent liabilities?

Give two examples of fictitious assets.

Mention two contingent liabilities.

Distinguish between a Trading Account and a Profit and Loss Account.

Answer in One Sentence:

What is a Trading A/c?

Explain the nature of a Trading Account.

Explain the needs of a Trading Account.

Answer in One Sentence:

What do you mean by Profit & Loss A/c?

Explain the needs of the Profit and Loss Account.

What is a Balance Sheet?

What are the features of a Balance Sheet?

Distinguish between a Balance Sheet and a Trial Balance.

Distinguish between a Profit and Loss Account and a Balance Sheet.

Explain the methods of marshalling of a Balance Sheet.

Give a classification of assets.

Give a classification of liabilities.

Identify the last step of the Final accounts, which is prepared after Profit and Loss Account. Explain in brief.

Collect the annual reports of at least two companies. Study the Balance Sheets given in the reports. Which order is followed for arrangement of assets and liabilities in the Balance Sheet of the two companies? Which order do you prefer and why?

Abraham is in business. The following balances were extracted from the books as on 31.12.2022. You are required to prepare a trading account and a profit and loss account for the year ended 31.12.2022 and a balance sheet as on that date. 

When preparing the accounts, it is necessary to take the following matters into consideration: Closing stock on 31.12.2022 was ₹ 8,760.

From the following balances of Mr. Kumar, prepare final accounts for the year 2023: 

The following is the trial balance of Harinath’s business, for the year ending 31 March 2023:

Prepare the trading account and the profit and loss account for the year ended 31-3-2023, together with the balance sheet as on that date.

Stock on 31-3-2023 valued at ₹ 5,690.

From the following trial balance and other additional information obtained from the books of Mr. Sunil Gavaskar, prepare his trading account and the profit and loss account for the half-year ended 30th September, 2023 and his balance sheet as on that date:

1. Stock was valued at ₹ 40,000 on 30.9.2023.

Mr. Patil, the owner of Jai Hind Engineers, submits the following trial balance to you for the year ended 31st March 2023:

Prepare the final accounts for him. Closing stock is valued at ₹ 5,400. 

Mr. Sputnik, who is always in a hurry, prepares the following trial balance as at 31.12.2023. You are required to prepare the final accounts, taking into consideration the trial balance for the year ended 31st December 2023.

Closing stock is ₹ 7,500.

The following trial balance was extracted from the books of A. Harding, as on 31st March, 2023:

Prepare the complete set of final accounts for Mr. A. Harding, after incorporating the following adjustment:

1. Closing stock is ₹ 26,000.

The following is the trial balance of Mr. A. Chatterjee for the year ended 31st December, 2022. Compile the final accounts for him, after incorporating the adjustments and thereafter supply him with the required information, listed by him.

Closing stock value is ₹ 15,000.

The following is the trial balance of Mr. C. Nariman for the year ended 31st December, 2022. Complete the final accounts for him, after incorporating the adjustments, and thereafter complete the required details listed by him. 

Stock on 31.12.2022 is ₹ 30,000.

Mr. P.H. Mehta is in business. The following balances were extracted from the books as on 31.12.2022. You are required to prepare the Trading Account and the Profit and Loss Account for the year ended 31.12.2022 and the Balance Sheet as on that date. 

Closing stock on 31.12.2022 was ₹ 48,700.

The following is the trial balance of Mr. R.P. Sharma for the year ended 31st December, 2022. Compile the final accounts for him, after attending to the adjustments and thereafter also submit the required information, listed by him.

Closing stock value is ₹ 7,500.

From the following trial balance of Mr. Roobex, prepare the final accounts of the year ended 31.12.2022.

Closing stock on 31.12.2022 was ₹ 56,000.

The following is the trial balance of Miss H. Seattle as on 31st December, 2022. 

Compile the final accounts for the owner, after attending to the adjustment given below.

1. Closing stock is evaluated at the lower market price ₹ 42,000 ignoring the cost price, which is higher by ₹ 4,000.

The following is the Trial Balance of Mr. Gupta for the year ended 31st December, 2022. Compile the final accounts for him, after incorporating the adjustments given.

Closing stock is valued at ₹ 50,000. 

The following is the trial balance of Mr. Sharma as on 31st March, 2023.

Compile the final accounts for the owner.

An inventory of the godown on 31.3.2023, reflected unsold stock valued ₹ 50,000.

The following is the trial balance of Mr. P. Crooke as on 31.03.2023.

Compile the final accounts for the owner, after attending to the adjustment given below.

Adjustment:

1. Stock in the Godown as on 31.3.2023 is ₹ 35,000.

From the following Trial Balance of Mr. Rajesh, prepare final accounts for the year ended 31.3.2023:

Closing stock is valued at ₹ 45,000 (Its market price is only ₹ 40,000).

The following is the trial balance of Mr. M. Moonlite as on 31.3.2023. The Closing Stock as on 31.3.2023 is ₹ 40,000.

Compile the final accounts for the owner.

From the following Trial Balance of Mr. Bhatia as on 31.3.2023, prepare final accounts for him:

Closing Stock is ₹ 45,000.

Trial Balance as on 31.3.2023 of Ms. Counsel.

Compile Final Accounts:

1. Closing Stock at the cost price is ₹ 8,000 more than the opening stock - but the ruling market price is ₹ 35,000 only, on 31.3.2023. 

Trial Balance of Mr. Goyal as on 31.3.2023:

Compile Final Accounts:

1. An inventory of the godown on 31.3.2023 reflected stock value stated as ₹ 50,000.

From the following Trial Balance of Rinky, prepare a Trading Account and a Profit & Loss Account for the year ended 31.12.2022 and a Balance Sheet on that date.

Closing Stock ₹ 15,000.

The following Trial Balance was from the books of Ram as on 31st December 2022.

Prepare a Trading Account and a Profit & Loss Account for the year ended 31st December 2022 and a Balance Sheet as at that date.

The value of Stock on 31st December 2022 was ₹ 14,920.

The following is the Trial Balance of Amrit Roy as on 31st December 2022:

You are required to prepare the final accounts for the year ending 31st December 2022.

Closing Stock on 31.12.2022 was valued at ₹ 4,340.

The following balances were extracted from the books of Sri S. Kumar on 31st December 2022.

Stock on 31st December 2022 was valued at ₹ 23,500.

Prepare Final Accounts for the year ended 31st December 2022.

On 31st December, 2022 the following Trial Balance was extracted from the books of Mohan:

Prepare a Trading Account and a Profit and Loss Account for the year ended 31st December, 2022 and a Balance Sheet as on that date after taking into account the following: 

Stock on 31st December, 2022 was valued at ₹ 7,000.

From the following trial balance of Mr. A prepare a Trading Account and a Profit and Loss A/c for the year ending 31st Dec., 2022 and a Balance Sheet as on that date:

Stock on 31st Dec., 2022 was ₹ 40,925.

Prepare a Trading, Profit and Loss A/c. and Balance Sheet of M/s. Sultan Enterprises for the year ended 31st March, 2023 from the following Trial Balance:

Closing Stock was ₹ 15,250.

Prepare Trading, Profit and Loss A/c and Balance Sheet of M/s Banerjee Enterprises for the Year ended 31st March, 2023 from the following Trial Balance.

Closing stock was ₹ 10,360.

From the following trial balance of Shri Rai Bahadur, prepare Trading, Profit and Loss Account for the year ending 31st March, 2023 and a Balance Sheet as on that date:

The closing stock on 31st March was valued at ₹ 8,760.

The following is the Trial Balance of ABC Industries as on 31st December 2015.

The closing stock was valued at ₹ 9,000.

You are required to prepare a Trading Account and a Profit and Loss Account for the year ending 31st December 2015 and a Balance Sheet as on 31st December, 2015.

From the following Trail Balance of A.B. Chandra as on 31st December, 2019.

The closing stock was valued at ₹ 12,000.

You are required to prepare a Trading Account and a Profit and Loss Account for the year ending 31st December 2019 and a Balance Sheet as on 31st December, 2019.

Prepare a Trading, Profit and Loss account of Mr. A. Awasthi for the year ending on 31st March, 2022 and a Balance Sheet as on 31st March, 2022.

Closing stock on 31st March, 2022 was valued at ₹ 78,000.

Prepare a Trading, Profit and Loss Account of XYZ, for the year 31st March, 2022 and a Balance Sheet as on 31st March, 2022.

Closing Stock was valued at ₹ 60,000 on 31st March, 2022.

Prepare a Trading, Profit and Loss account of Mr. ABC for the year ending on 31^st March, 2023 and a Balance Sheet as on 31^st March, 2023.

Closing stock on 31st March, 2023 was valued at Rs. 78,000.

Given below is the Trial Balance of M/s. Krishna & Sons Pvt. Ltd. as on 31st March, 2023. Prepare a Trading and  Profit and Loss account for the year ending 31st March, 2023 and a Balance Sheet as on the same date.

Trial Balance of M/s. Krishna & Sons Pvt Ltd. as on 31st March 2023.

Closing Stock was valued at ₹ 25,000

Prepare a Trading, Profit and Loss account of Mr. ABC for the year ending on 31^st March, 2023 and a Balance Sheet as on 31^st March, 2023.

Closing stock on 31st March, 2023 was valued at Rs. 78,000.

The following Trial Balance was extracted from the books of Mr. Joseph as on 31^st March, 2024. You are required to prepare the Trading Account and the Profit and Loss Account for the year ended 31^st March, 2024. Also, prepare a Balance Sheet as on 31^st March, 2024.

Closing Stock was valued at 20,000 on 31^st March, 2024.

Given below is the Trial Balance of M/S. Raj & Co Ltd. as on 31st March, 2024. Prepare a Trading and a Profit and Loss account for the year ending 31st March, 2024 and a Balance Sheet as on 31st March, 2024.

Closing stock was valued at ₹ 9,000.

What are liquid assets?

Distinguish between Book Keeping and Accounting.

Give a classification of assets.

What are contingent liabilities?

Explain the needs of the Profit and Loss Account.

Explain the nature of a Trading Account.

Explain the needs of a Trading Account.

Explain the needs of the Profit and Loss Account.

What are the features of a Balance Sheet?

Distinguish between a Balance Sheet and a Trial Balance.