Bank a/c dr. 8000To Cash a/c 8000Cash a/c dr. 5000To Bank a/c 5000Cash a/c dr. 3000To Bank a/c 3000Provision for bad debts a/c dr. 1650To Mahendra a/c 1650Salary expenses a/c dr.4600To Cash a/c 4600
Ans no. 2
(i)Profit for the year is calculated by subtracting the expenses from the revenue.As,
is the significant relation between revenue and expenses of the business, it has been applied in the treatment of profit for the year.
Accounting cost concept
states that all assets are recorded in the books of accounts at their purchase price, which includes cost of acquisition,transportation, and installation and not at its market price.Itincludes all types of assets like plant and machinery, building,stock,vehicle and so on. Thus, for thetreatment of Stock
Morgan's Balance Sheet as at 31
Capital & LiabilitiesAmountAssetsAmountCapitalProfit of the year Loan from Nicolarepayable 2011900018,0005000MachineryOffice equipmentCashDebtors700025002003500