Week 13

Fundamentals of
Financial Accounting
(FFA)

BBA 2k21
Financial Statements
Statement of Total Comprehensive Income (Income & Expense)
1- Statement of P&L
2- Statement of OCI – Unrealized Expense & income
Statement of Financial Position (Assets , Liabilities & Equity)
Statement of Changes in Equity (Equity)

Statement of Cash flow (IFA)

Notes to Financial Statements
Example- 1
B- Prepaid Rent
Prepaid Expense/ Paid In Advance – Current Asset

Rent Expense (Dr.) Rs. 14,000

Cash (Cr.) Rs. 14,000

RS. 700 Prepaid Rent

Prepaid Rent (Dr.) Rs. 700 (Asset) (SFP)
Rent Expense (Cr.) Rs. 700 (SP&L)
A- Heating & Lighting
Rs. 400 is owed for heating & lighting Expense (Liability) Accruals /
Accrued Expense

Heating & Lighting Expense (Dr.) Rs. 400 (SP&L)

Accruals / Heating & Lighting Payables (Cr.) Rs. 400 (SFP)
C- Bad debt written off Rs. 1,200
Irrecoverable Debt Expense / Bad debt (Dr.) Rs. 1,200 (S&PL)
Trade Receivables (CR.) Rs. 1,200 (SFP)
C- Allowance for Receivable / Provision for
doubtful debt Increased to Rs. 4,500
Irrecoverable debt Expense (Dr.) Rs. 500 (SP&L)
Allowance for receivable (Cr.) Rs. 500 (SFP)

(Reduction of Trade Receivables) (SPF)

Trade Receivables
Less: Allowance for receivables

Opening Balance – Allowance for Receivables – Rs. 4,000 (Cr.)

Now increase to Rs. 4,500 (4,500-4,000) = Rs. 500
D- 10% Depreciation of Cost
Straight Line Cost * 10%
Reducing Balance Carrying amount (Cost – Acc. Dep) * %ge

Rs. 146,000*10% = Rs. 14,600

Depreciation Expense (Dr.) Rs. 14,600 (SP&L)

Accumulated Depreciation (Cr.) Rs. 14,600 (SFP)

(Reduction of Asset)
Asset XXX
Less: acc. Dep
E- Closing Inventory Rs. 16,500
1- Cost of Sales (Closing Inventory) Reduce (SP&L)
2- Closing Inventory (C Asset) SFP

Inventory (Dr.) Rs. 16,500 (SPF)

Cost of Sales (Cr.) Rs. 16,500 (SP&L)