G ahlot Institute of

M anagem ent Research and

Studies

presented by :- Geeta gupta

Roll no:- 08
Subject:- Financial
statement

Corporate Recognition
Capital Expenditure
Revenue Expenditure
R & D expenses
Preproduction cost
Deferred revenue expenditure

CapitalExpenditure
DEFINITION OF 'CAPITAL'
1. Financial assets or the financial value of

assets, such as cash.

2. The factories, machinery and equipment
owned by a business and used in production.

Capital can mean many things. Its specific

definition depends on the context in which it is
used. In general, it refers to financial resources
available for use. Companies and societies
with more capital are better off than those
with less capital.

Revenue Expenses

1. For a company, this is thetotalamountofmoneyreceived by

the company forgoodssoldorservicesprovided during a certain
timeperiod. It alsoincludesallnet sales,exchange of assets;
interestand any otherincreaseinowner's equityand is
calculated before anyexpensesare subtracted.
For example: revenue could be recognized when adealis signed, when the
money is received, when the services are provided, or at other
times. There arerulesspecifying when revenue should be
recognized in different situations for companies using different
accounting methods, such ascash basisand
accrual basis accounting.

R & D Expenditure
DEFINITION OF 'RESEARCH AND

DEVELOPMENT (R&D) EXPENSES:Any expenses associated with the

research and development of a
company's goods or services. R&D
expenses are a type of operating
expense that can be deducted as
such on the business tax return. This
type of expense is incurred in the
process of finding and creating new

Preproduction cost
Numerous suppliers (e.g., in the

automotive industry) work with their

customers to design and develop
products or molds, dies, and other tools
to manufacture such products. These
costs may be called preproduction costs
related to long-term supply
arrangements. Under these
arrangements, customers sometimes
reimburse suppliers for the incurred
costs. In this article, we will discuss
accounting for such costs.

D eferred revenue expenditure

Meaning:-

Sometimes, some expenditure is of revenue nature but its

benefit likely to be derived over a number of years. Such
expenditure is calleddeferred revenue.
Example :
Sometimes even a big loss, arising from an accident or
other unforeseen circumstances, may be spread over 3 or
4 years instead of being charged off wholly against the
revenues of the year in which the loss is actually suffered.
The loss of building because of an earthquake may be
treated on this manner. This type of loss is treated as
revenue expenditure. It may be note here that the amount
which has not been charged off to the profit and loss
account is shown in the balance sheet as a sort of asset.

Financialstatem ent
Horizontal form
Vertical form

H orizontalform

Profi
tand loss a/c forthe years ended 31 st m arch 2013

particular

Rs

Rs

particular

Rs

Rs

To gross loss
c/d

xx

by Goss
profit c/d

xx

To Office &
administrativ
e exp

xx

By other
Income

xx

To selling &
distribution
expense

xx

By
Abnormal
profit

xx

To financial
Expenses

xx

By net loss
b/d

xx

To
maintenance
expenses

xx

To Abnormal
losses

xx

To net profit
b/d

xx

Balance sheetas on 31 m arch 2013

liabilities

Rs Rs Assets

Capital

xx

Fixe assets

Less- drawing

(x
x)

Goodwill

xx

Add- net profit

xx

Patents

xx

Less- net loss

(x
x)

Land &
building

xx

Currents
liabilities

Plant &
machinery

xx

Sundry creditor xx

Furniture &
fixture

xx

Bank overdraft

xx

Currents
assets

Outstanding
exp

xx

Sundry
debtor

xx

Loan taken

xx

Bills
receivable

xx

Income

xx

Closing stock

xx

xx

Rs Rs

xx

xx

VerticalBalance Sheetas on 31 M arch 2013

Sr.
no

particular

I]

SOURCES OF FUND

Shareholder

ii]

Note Rs
no

Share capital

xx

(+) Reserves & surplus

xx

(-)miscellaneous expenditure

(xx)

Rs

xxx

Add- Borrowed fund

Secured loan

xx

Unsecured loan

xx

Borrowed loan

xxx

Total fund available (A+B)

xxxx

Application of fund:Fixe assets

Sr.
no

Particular

Investment

Working capital

Current Assets
Quick Assets
Non quick Assets

Not Rs
eno.

RS
xx

xx
xx
xx

Currents liabilities

(xx)

Quick assets

xx

Non quick assets

xx

Working capital (A-B=c)

xxx

Total fund employed

(A+B+C)

xxx

Thanking You