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Financial Accounting-I

Notes Long-term Liabilities Debtors —
Capital — Closing Stock —
(+) Net Profi t — Fixed Assets
— Land & Building —
(–) Drawings — — Plant & Machinery —
Long-term Loans — Furniture —
Contingent Liabilities Investments (Long-term) —
— Goodwill —
— Patents & Trademarks —
Livestock —
— —

Balance Sheet prepared in Permanency Order

Balance Sheet prepared under this order is the reverse of the Balance Sheet prepared in liquidity

order. In this case first those assets are shown which are more permanent means fixed assets and

then less permanent assets (Current Assets) are shown. Similarly, first long-term liabilities (more
permanent) are shown then less permanent (short-term on current) liabilities are shown. The
proforma of such type of Balance Sheet is given below:
Proforma of Balance Sheet in Permanency Order
(as on ……………. )

Liabilities ` Assets `
Long-term Liabilities Fixed Assets
Capital — Land & Building —

(+) Net Profit — Plant & Machinery —
— Furniture —
(–) Drawings — — Long-term Investment —
Long-term Loans — Goodwill —
Current Liabilities Patents & Trademarks —
Sundry Creditors — Livestock etc. —
Bank Overdraft — Current Assets
Bill Payable — Cash in Hand —
Short-term Loan — Cash in Bank —
Outstanding Expenses — Short-term Investments —
Un-accrued Incomes — Bill Receivable —
Prepaid Expenses —
Accrued Incomes —
Debtors —
Closing Stock —
— —

12.5 Adjustment Entries

If the accountant finds that some transactions are not incorporated (making proper accounting)

in the books or wrongly incorporated in books, to complete the records and rectifying the errors

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