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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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