Page 170 - DMGT104_FINANCIAL_ACCOUNTING

Particulars
( )
Particulars
( )
To Gross Loss (if any) transferred

from Trading Account
from Trading Account)
To Staff Salries
By Discount Received
----
----
To Office Rent
By Commission Received
----
----
By Dividend
----
----
To Rates & Taxes
----
By Interest Received
----
To Office Lighting and Heating
----
To Printing & Stationary
By Rent from Tenant
----
By Interest from Bank
To Bank Charges
----
----
----
By Interest on Drawings
To Insurance
----
By Profit on Sale of

To Telephone Charges
----
----
----
To Legal Expenses ---- By Gross Profit (transferred ----
Investment
To Repairs ---- By Provision for Discount on
To Postage & Stamps ---- Creditors ----
To Trade Expenses ---- By Bad Debts recovered ----
To Establishment Exps. ---- By Profit on Sale of Assets ----
Financial Accounting
To Audit Fees ---- By Other Incomes ----
To Charity & Donations ---- By Net Loss (if any)
To Management Exps. ---- transferred to Capital A/c ----
Notes To Depreciation on
Land & Buildings ----
Plant and Machinery ----
Furnitures ----
To Stable Expenses ----
To Directors Fee ----
To Bank Charges ----
To Interest on Loan ----
To Interest on Capital ----
To Discount on B/R ----
To Sales Tax ----
To Advertisement ----
To Bad Debts ----
To Agents’ Commission ----
To Travelling Expenses ----
To Free Samples distributed ----
To Warehouse Expenses ----
To Packing Expenses ----
To Brokerage ----
To Distribution Expenses ----
To Delivery Van Expenses ----
To Provision for Bad and Doubtful ----
Debts ----
To Entertainment Expenses
To Carriage Cutward ----
To Loss on Sale of Assets ----
To Licence Fees ----
To Repairs of Assets & Motor Car ----
To Loss by Fire ----
To Conveynance Expenses ----
To Net Profit (Transferred to ----
Capital A/c.) ----
----
----- -----
Operating Profit and Net Profit
Operating profit is the excess of profit over operating expenses. Operating expenses include
office and administrative, selling and distributive expenses, cash discount allowed, interest on
short term loans etc. Therefore operating profit = Net sales – operating expenses, whereas
operating expenses = cost of Goods sold + administrative and office expenses + Selling and
distributive expenses or
Operating Profit = Net Profit + Non-operating expenses – non-operating income.
Net Profit means the excess of revenue over expenses and losses (whether operating or non-
operating). In other words, net profit is calculated by deducting operating expenses from operating
profit as well as non operating profit.
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