Management study
1. Divisible Profit and Dividend- Divisible profitsmeans the maximum amount of profit which are legally available for distribution as dividend to the shareholders. Divisible profit is arrived afterdeduction of depreciation and income tax. Dividend...
1. Provisions- As per the Companies Act, 1956, the expression ‘provision’ means any amount written off or retained by providing for depreciation, renewals or diminition in value of assets, or retained by way of...
The following points should be considered while preparing final accounts of the company: 1. Proper Format- Final accounts of a company contains balance sheet at first and then the profit and loss account and...
In this form, Profit & Loss A/c is divided into three parts, namely (i) Trading A/c, (ii) Profit & Loss A/c, and (iii) Profit & Loss Appropriation A/c. (i) Trading Account- On the debit...
1.Balance Sheets prepared after the balance sheet of the first year should display the figures for previous year. 2.Figures in the balance sheet should be rounded off to nearest rupee. Currently, amount in the...
From the horizontal proforma of the balance sheet it is clear that the balance sheet has got two sides: I. Liabilities side, and II. Assets side. I. Liabilities Side: Liabilities side of the balance...
Trading and profit and loss, account shows the net or profit or net loss of the business. But, the net profit or net loss of the business does not represent the financial position of...
1. Salary: Salary paid is an indirect expenses and so It is recorded in debit side of Profit and Loss A/c but salary paid to an employee in a factory is a direct expense...
Trading Account considers all direct expenses and Profit or ‘Gross Loss’ of the business. However, many indirect expenses and incomes are also occurred in the general working of the business, which are essentially needed...
Final account is prepared at the end of each year to know the trading result and financial position of the business. For this the final account is divided into three parts: 1. Trading account2....