a t wh1 h have phy 1cal existence, i e, they can 1:,wrfltlllillJt·•·

of an bl a t ar land building, machinery, com~,

t which do not have physical existence; i.e., they

Examples of intangible assets are patents, goodwill,
tc

th ass,ets which are held by an entity or enterprise with the

PW~!e o n ing th m into ca h within a short period, i.e., one year. For extun~e,
purcha ed with a purpose to resell and earn profit, debtors exist to conv.ert
tiO ~Ha. rec iv th amount from them, bills receivable exist agam fdr
aaa:mst it tc
 Double Entry Book Keeping

f on it Operating Activities, i.e,

1 I 10fit. For example, profit earned frolll

Et profit.

(:Venue from sales and/or services rendered

r total expenses.
c ing tofal expenses 'from total revenue and other
expenses are more than the total revenue and

fl. Gain
,, : .
Jwner equity resulting from transactions other than the day
r m rregular or non-recurring nature. Stating differently, it is
from ran actions which are not the Operating Activities of the
c d ntal o 1t such as gain on sale of land, machinery or investments
"

a perio over its revenues and other Income. It decreas

broad term and includes loss incurred in its operatin
ney or money' worth lost against which the firm receives n
t m th ft and loss arising from events of non-recumng
of fixed .

er raw ma or re le or for manuf:

ludes both cash and credit purchases of goods.
 Bas Ace o n mq . . r s
2.9
J 7. Sales Return

(
1
Tc>od~ ,.,uld whl:n tu ·n •cl b th h
~ P pure a~Pr arp termpd a::, Sales Return or Returns
Inward.
18. Revenue from Operations r ~/ c / )
J

' s r/P ~/.,ids and/or •en·ices or both.

Rt. venue from Op( · tH n ffi'"tn • 1• db · · f' ·
. • . . VPnue Parne
"< ::.. l y an enterprise ( irm or company)
from it )p( ratm~ actl\ tws, i.e. hu:-.me::,~ aetivitie::;. It is net of sales return. i.l'., Sales
1
Sales _Ret rr · f .x ln 1J> ( r-.. ar(: Net ~ale of Goods, sale of services, (fo1· non-financial
PiltE. rpn ts) c nd 1nt rP'--t Pc nwd, (•tc.
19. Goods

vn I product.
Good ... an the phv::-/ r tl ltt>n.s of r adc that are purchased or manufactured to be sold.
The h'rm appliPs to 11 th( i .. •m!-,; making up the ~ales or pure hasps of a business. Stating
diffPrent ly. thPv art> tht Htock m-TrndP of an ~nterprisE', purchased or manufactured
with the purpo,:,;e of bellin~r. [·or an 0nterpr1sp dealing in home appliances such as TV,
FridgP. A(, Ne .. Hll' good::-- and for a ~tat10ner, Stationery is goods.
~ Stock/Inventory
( oo, s, •n a 1 i ~ 1 ol >n nu.., din manufactunng of product a.,:; on a particular date.
Stock <Inventory) is a rurl"ent as:::-.et held by an enterprise for the purpose of sale in the
ordinary course of business or for thP purpose of using it in the production of goods
meant for sale. Stock (Inventory) may be: (i} Opening Stock (Inventory) or (ii) Closing
Stork (Inventory).
(i) Opening Stach (Inventory) is the stock-in-hand in the beginning of the accounting
year. In other words. it 1s stock-in-hand at the end of the preYious accounting year.
(it) Closing Stach (Inventory) is the stock-in-hand at the end of the ctm:ent accounting pPriod.
Stock or Inventory may be of the following kinds:
(i) Stock or Inventory of Goods
Stock, Goods or Inventory in the case of a trading concern comprises ::;tock (Inventory)
of goods remaining unsold. In the case of manufacturing concern, it comprises processed
goods manufactured for the purpose of sale. It is valued at cost or net realisable value
(market value), whichever is lower.
(ii) Stach or Inventory of Raw Material
It comprises the stock of raw ~terial used for manufacturing of goods lying unused.
For example, stock of clot~ to be used for stitching shir~s. It is valued at cost or net
realisable value (market value), whichever is lower.
(iii) Work-in-Progress
It is a stock that is in the process of being finished, i.e .. they are partly finished goods.
It is valued at an aggregate of cost of raw material used, cost oflabour, other production
cost, i.e., power, fuel, etc.
 Double Entry Book Keeping C8SE,o

,c < t h. u m J<
oc,d , nd/01 < 1 vH (sot both rendered in th

rr d H•' ('( I 1I)I( , I . .

,111d btlJ · n: ceivahlP.

Db or
JI
ah/( a a ui t ale of goods and/or

1 , 1,t
1
it~ who ow( irnount to t.he f•nLPrprjHe against credit sale
( rvH < r1·11cl1 1t d ot both

Bill Rec ll ahh

d btor
a( cl'pted by a debtor, the amount of which
Bill R cmvnblf• m< .tn
will b pc•uf H d dat(.
edule Ill of the Companies Act, 2013
reci!iva1ble by h nt rprl against goods old and services r nd

22. Trade Payables

6 : ,
of ood n I or ervice or both
It i the amount payable for purchase of goods and/or services or both taken in the
ordinary course of business.
Trade Payables is the sum total of creditors and bills payable.
Creditor
·.i'...
r
:-
/
~ ~ r, ~\ ...
•' C I,\;
r • y

• ,._,_, • ,) •
' able mnst purch 0 00 8 u:n.f11t!JL'"~•-'

-" :; -
.... ...
'
'' - . '
•,,,, :,,

Creditor is a person or an enterprise to whom an enterprise owes amount against credit

purchases of goods and/or services taken or both.
Bi/.l Payable
,- ~ • J' .: .- • • .. \'; ,• • • l' ;.: ', •,...

' • • 4 ',

HI P~abl~ means a Bill of Exchange accepted by the person or enterprise, the amount
of which will be payable on the specified date.
 ubl n ry k ~ 'Pl,,ru---ca

t r t Ju h ,ok ,f « o H t u L<J tie Hd )r~-ralbfta.

11 mewl f ran w tiou of rm ~ntity arc r ~cord d a

Jo urn l and J,£ dg< r
30. Cost of Goods Sold
JlPrl/lJ'jtl'Jl ,., nd ,., d or both
f £ di r < t co f attrihutabk to the prCJduction of good Id a

t
An a ount ha two e. d h t and crf d1t. Cr dit th~ right ide of an a~..,.,, .........
1
If n ac ount i to d, then the f ntry 1 po ted to the red1t ide of th a...,..,v·uu,.
31. Debit

An acc:oun t d bit and credit. Th I

th 1 t If an account 1 to h d b
to t t of th ac o t.
aa. Depreciation
" ~ I' • • •
_•',•' I - r , ,-1,

~ • • • I • • 1

ffl X
 pay 1 s de11w.

u ines and bears all the risks assoo1a-

 ?

unt allowed?
u11tK.Uunt' If yes, what 1S the amount?
 lu
µu11 l.:11,ru,t=d
d1t
h d btor nd wh t 1

th total mount of xp n
( Wh 1 h mount of drawmg ofGopal?
[(i), 8,00,000; (u) Furrutu
{m) f 4,00,000 +,
2,00,000 ,
(v} Rajesh t 1,50