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Unit 12: Final Accounts
13. Interest received is an asset. Notes
14. Interest accrued is an asset.
15. Bad debts are personal account.
12.10 Review Questions
1. What do you mean by Trading Account? Give the proforma of Trading Account and
explain why it is prepared.
2. What is the importance of Balance Sheet? Give a form of Balance Sheet in Liquidity order
with imaginary examples.
3. What do you mean by adjustment? Explain the different adjustment entries.
4. Write short notes on the following:
(a) Net Profi t
(b) Capital and Revenue Expenditures
(c) Capital and Revenue Receipts
5. Illustrate the interrelationship between the accounting statements and statement of
position.
6. Highlight the effect of the following entries in the:
(a) Closing stock
(b) Interest received in advance
(c) Rent outstanding
7. From the following information extracted from the books of Jain & Co, prepare Trading,
Profit & Loss A/c for the year ended and Balance sheet as on dated.
Particulars Debit ` Credit `
Purchase 90,300
Sales 1,37,200
Return inward 2,200
Stock 1.1.96 40,000
Drawing 5,000
Building 30,000
Machinery 20,000
Furniture 8,000
Debtors 25,000
Wages 3,000
Carriage inwards 2,000
Rent and Rates 1,500
Bad debts 1,000
Cash 3,500
Investment 10,000
Postages 2,500
Insurance 2,000
Return outwards 1,300
Capital 50,000
Creditors 24,000
Contd...
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