The ………. is prepared at a particular date usually the end of the financial year, while the ………. is prepared for a particular period.

Trading & Profit & loss account and balance sheet is prepared from:

Q. Steps of preparing Final Accounts is -
(a) Trading Account
(b) Profit and Loss Account
(c) Balance Sheet

Q. Prepare Trading and Profit and Loss Account for the year ended 31st March, 2018 and Balance Sheet as at that date from the following Traial Balance:

Particulars		Dr. (₹)	Cr. (₹)
Capital	................................................................................	…	1,00,000
Cash	................................................................................	15,000	…
Bank Loan	................................................................................	…	20,000
Purchases	................................................................................	1,20,000	…
Sales	................................................................................	…	1,50,000
Sales Return	................................................................................	10,000	…
Purchases Return	................................................................................	…	20,000
Establishment Expenses	................................................................................	22,000	…
Taxes and Insurance	................................................................................	5,000	...
Bad Debts	................................................................................	5,000	…
Provision for Doubtful Debts	................................................................................	…	7,000
Debtors	................................................................................	50,000	…
Creditors	................................................................................	…	20,000
Commission	................................................................................	…	5,000
Deposits	................................................................................	40,000	…
Opening Stock	................................................................................	30,000	…
Drawings	................................................................................	14,000	…
Furniture	................................................................................	6,000	…
Bills Receivable	................................................................................	32,000	…
Bills Payable	................................................................................	…	25,000
Input CGST	................................................................................	10,000	...
Input SGST	................................................................................	10,000	…
Output CGST	................................................................................	…	8,000
Output SGST	................................................................................	…	8,000
Output IGST	................................................................................	…	6,000
Total		3,69,000	3,69,000

Adjustments:
(i) Salaries ₹ 1,000 and Taxes ₹ 2,000 are outstanding but Insurance ₹ 500 is prepaid.
(ii) Commission ₹ 1,000 received in advance for the next year.
(iii) Interest ₹ 2,100 is to be received on Deposits and Interest and Bank Loan ₹ 3,000 is to be paid.
(iv) Provision for Doubtful Debts to be maintained at ₹ 10,000.
(v) Depreciate Furniture by 10%.
(vi) Stock on 31st March, 2018 is ₹ 45,000
(vii) A fire occurred on 1st April, 2018 destroying goods costing ₹ 10,000. These goods were purchased paying CGST and SGST @ 6% each.

Q. From the following Trial Balance prepare Trading and Profit & Loss Account for the year ended 31st March, 2017 and Balance Sheet as at that date:-

	Dr. (₹)	Cr. (₹)
Stock 1st April, 2016	22,300
Purchases and Purchase Return	2,30,000	5,200
Freehold Premises	1,00,000
Incidental Trade Exp.	11,200
Insurance	1,850
Audit Fees	800
Commission Received		2,700
Interest		1,400
Debtors and Creditors	32,400	24,830
Wages	30,200
Salaries	15,200
Capital		1,50,000
Drawings	12,000
Income-Tax	3,600
Investments	8,000
Discount allowed & received	7,500	4,200
Sales Return & Sales	6,400	3,17,400
B/R	5,200
Office Furniture	9,000
Rent		2,600
Cash in hand	5,080
Bank Balance	7,600
	5,08,330	5,08,330

Adjustment:-
1. Stock at 31st March 2017 is ₹ 70,000.
2. Write of 5% Depreciation on Freehold Premises and 20% on office furniture.
3. Commission earned but not received ₹ 500.
4. Interest earned ₹ 600.
5. ₹ 200 for rent have been received in advance.
6. Charge interest on Capital @ 6% and ₹ 500 on Drawings.

Q.

State whether the following statement are true or false.

1. Final Accounts are prepared on the basis of Trial Balance.
2. Trading Account is a part of Profit & Loss Account.
3. Profit Loss Account is prepared to find out Gross Profit or Gross Loss.
4. Gross Profit or Gross Loss is transferred to Balance Sheet.
5. An amount of net profit is added to the capital.
6. All indirect expenses are debited to trading account.
7. Balance Sheet is a statement and not an account.
8. Capital account is a personal account.
9. Amount of prepaid expenses appears on assets side.
10. Bank Overdraft is a liability of business concern.

The ………. is prepared at a particular date usually the end of the financial year, while the ………. is prepared for a particular period.

The correct option is C Balance sheet & Profit & Loss account The Balance Sheet is prepared at a particular date usually the end of the financial year, while the Profit and Loss account is prepared for a particular period.

The correct option is C
Balance sheet & Profit & Loss account

The Balance Sheet is prepared at a particular date usually the end of the financial year, while the Profit and Loss account is prepared for a particular period.