Professional Documents
Culture Documents
ACCOUNT
The statement of account
which is prepared to identify
the cost of goods produced
in a specific accounting period,
is called the Manufacturing Account.
It is needed only for manufacturing concerns.
It is not needed for Merchandise concern.
In a simple manufacturing process the manufacturing
cost start in a number of ways.
They may be
cash payments,
incurrence of liabilities,
fixed assets depreciation, or
the expiration of prepaid expenses.
Manufacturing Classified .
Transferred Trading Account
Concerned
Material
Inventory
Account
Material are Work in Finished
purchased and Process Goods Trading
Factory
other Inventory Inventory Account
Payroll
manufacturing Account Account Account
costs incurred
Factory
Overhead
Account
If the total of credit side is greater than total of debit side the difference is gross
profit to be reported in the debit side. On the other hand, if the debit side's total
becomes greater than credit side's total difference amount is gross loss to be
reported in the credit side.
The trading account of merchandising
concern is slightly different from that of
manufacturing concerns.
Merchandising concerns buy and sell the
goods that do not need further
processing.
The debit side of the trading account of
merchandising company contain
opening inventory of merchandise,
the purchases and
all the purchase related expenses
Name Of Business Concern
Trading Account
For the Year Ended on ...
Dr Cr
Particulars Taka Particulars Taka
Opening Inventory xxxx
Purchases xxxx Sales xxxx
Less purchase return xxxx Less Sales Return
------- xxxx xxxx xxxx
Wages --------- xxxx
Freight xxxx Closing Inventory xxxx
Special Packing Wages xxxx Gross profit transferred to
Import Duty xxxx Profit & Loss Account
Carriage Inward xxxx
Clearing Charges xxxx
Dock Charges xxxx
Gross Profit transferred to xxxx
Profit & Loss Account
xxxxxx
====== xxxxxx
======
PROFIT AND LOSS
ACCOUNT
The profit and loss account is prepared to
determine the net profit or loss earned by
the concern in a specific period.
The credit balance of the account indicates
net profit and the debit balance of the
account indicate net loss.
Profit and loss account is prepared after
preparation of trading account
from which gross profit is taken as one of
the major component in this account.
In the debit side of the account
the gross loss,
the operating expenses,
general and administrative expenses,
financial expenses and losses
other non-operating expenses and
net profit are written.
The gross profit,
other income and
net loss are written
in credit side of the account.
Name Of Business Concern
Profit And Loss Account
For the Year Ended...
Particulars Taka Particulars Taka
Operating Expenses Gross profit transferred
Packing expenses xxxx from trading account xxxx
Warehouse Rent xxxx Rent received xxxx
Export duty xxxx Commission received xxxx
Carriage outward xxxx Discount received xxxx
Cost of price list xxxx Interest of bank deposit xxxx
Advertisement xxxx Interest on investment xxxx
TA of Sales person xxxx Profit on sale of assets xxxx
Commission xxxx Bad debts. Recovered xxxx
Salaries of salesman xxxx
Discount xxxx Net loss transferred to capital Account xxxx
Administrative Expenses
Office expenses xxxx
Office salaries xxxx
Office rent xxxx
Printing stationery xxxx
Telephone xxxx
General Expenses xxxx
Financial expenses and losses
Interest on overdraft xxxx
Interest on loan xxxx
Loss increased due to loss of xxxx
Investment xxxx
Loss on sale of asset xxxx
Repairing xxxx
Depreciation xxxx
Net profit transferred to capital
xxxxxx xxxxxx
====== ======
BALANCE SHEET
Balance sheet is a list of balances of
accounts that fell in the categories of
assets, liabilities, and owner’s equity.
Because even a fairly small company may
have hundreds of accounts, simply listing
these accounts by broad categories is not
very helpful to statement user.
Setting up subcategories within the major
categories will often make the financial
statements much more useful.
Investors and creditors often study and
evaluate the relationships among the
subcategories.
Investments
Intangible assets.
copyrights,
trademarks.
Current liabilities
Long-term liabilities.
Current liabilities
The category called current liabilities is made up
of obligations due within the normal operating
cycle of the business or within a year,
whichever is longer.
They are generally paid firm's current assets or
by incurring new short-term liabilities.
Under this heading are:
notes payable,
accounts payable,
taxes payable,
bonds payable,