Professional Documents
Culture Documents
The accounting year is termed as Fiscal Year i.e., involving financial matters which is
related to government revenue and taxes
In India normal accounting year starts from 01/04/2014 o 31/03/2015.
But it can be January to December or any other 12 months period which company
decides.
For tax purposes, however, income data is required for year ending 31/03/2015.
In the US, the Profit and Loss Account is called the Income Statement.
Note:- Im adding the format of Trading and Profit and Loss account
for people who are from non-commerce background. Please go
through them and practice the same as much as you can. As these
are important to solve problems or sums.
Meaning and Definition of Trading Account:The trading account is an account which shows merely the result of trading (i.e., buying and
selling of goods) called gross profit or gross loss.
In other words, it is the account which shows merely the result of buying and selling
of goods, i.e., gross profit or gross loss on trading, without taking into account the indirect
expenses and indirect incomes of the business.
In the words of J. R. Batliboi, The trading account shows the results of buying and
selling of goods. In preparing this account, the general establishment charges are ignored
and only the transactions in goods are included.
Format of Trading Account is as follows:-
Dr.
Particulars
Rs.
To Opening Stock
To Purchases
Less: Purchases Returns or
Returns Outwards
Expenses incurred in
acquiring and bringing
Rs.
xxx
xxx
xxx
xxx
Particulars
By Sales
Less: Sales
Returns or Returns
Inwards
By Closing Stock
By Profit and Loss
Account
Cr.
Rs
.
xx
x
xx
x
Rs.
xxx
xxx
(Gross loss
transferred to
Profit and Loss
Account)
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxxx
xx
xx
xxxx
xxx
x
Meaning of Profit and Loss Account:The profit and loss account is an account which shows the net profit or net loss (i.e., the
ultimate or final profit or loss) of a business for a particular trading period.
The net profit or net loss is the profit earned or loss suffered after charging all
business expenses. It is the final profit or loss of a business.
Format of Profit And Loss Account is as follows:Note:- There are two formats of Profit and Loss Account preparation, which Ive
mentioned below:First format of P&L A/c
Cr.
Rs.
xxx
Administration
Expenses:
Salaries
Rent, rates and
taxes
Office lighting and
heating
Insurances
Printing and
Stationery
Postage and
telegrams
Rent received
xxx
xxx
xxx
xxx
xxx
xxx
General charges
xxx
Telephone charges
Audit fees
Legal Expenses
Bank charges
To Maintenance
Expenses:
Repairs
Depreciation
To Selling and
Distribution
Expenses:
Advertisements
Travelling expenses
Cartage, carriage or
freight outwards
Commission paid
Bad debts
To Financial
Expenses:
Cash discount
allowed
Interest on loan
taken
Interest on capital
To Miscellaneous
expenses:
To Capital Account
(Net profit
transferred to capital
account)
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
Commission
received
Discount
earned
Bad debt
recovered
Interest
received
Capital
Account
(Net loss
transferred to
capital
account)
xxx
xxx
xxx
xxx
xxx
xxx
Rs.
xxxx
Rs.
xxxx
Rs.
xxxx
Rs.
Cr.
Rs.
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxxx