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Financial Accounting

Lecture 14

09 Paid to Mr. A Rs. 25,000 through cheque


Mr. A Date Feb 01 Feb 10 Feb 17 No Narration
Balance B/F

Code 07 Cr. Rs. Bal. Dr/(Cr) 15,000 60,000 (15,000) (75,000) (50,000)

Dr. Rs.

06 Credit purchase from B 09 Paid to A 25,000

Bank Account
Date Feb 01 No Narration
Balance B/F

Code 02
130,000

Dr. Rs. 130,000

Cr. Rs. Bal. Dr/(Cr)

Feb 02
Feb 05 Feb 15 Feb 17

01 Cash deposited
03 Expenses payable paid 08 Fixed deposit placed 09 Paid to A

25,000
15,000 75,000 25,000

155,000
140,000 65,000 40,000

Financial Accounting

Lecture 14

10 Received cash from Mr. B. Rs. 75,000.


Mr. B
Date Feb 01 Feb 06 Feb 07 Feb 12 Feb 20 04 05 07 10 No. Narration
Balance B/F Cash received from B Discount given to B Credit sale to B Received from B

Code 09
Cr. Rs. 14,000 1,000 Bal. Dr/(Cr) 15,000 1,000 0 95,000 75,000 20,000 Code 01 Cr. Rs. 25,000 Bal. Dr/(Cr) 35,000 10,000 24,000

Dr. Rs. 15,000

95,000

Cash Account Date Feb 01 Feb 02 Feb 06 01 04 No. Narration


Balance B/F Cash deposited Cash received from B

Dr. Rs. 35,000 14,000

Feb 20

10

Received from B

75,000

99,000

Financial Accounting

Lecture 14

11 Salaries accrued Rs. 5,000.


Salaries Date Feb 01 Feb 28 11 No. Narration
Balance B/F Salaries Accrued

Code 10 Cr. Rs. Bal. Dr/(Cr) 5,000 10,000

Dr. Rs. 5,000 5,000

Expenses Accrued Date Feb 01 Feb 03 Feb 05 Feb 28 02 03 11 No. Narration


Balance B/F Expenses payable reduced Expenses payable paid Salaries Accrued

Code 12 Cr. Rs. Bal. Dr/(Cr) 20,000 (20,000) (15,000) 0 5,000 (5,000)

Dr. Rs.

5,000 15,000

Financial Accounting

Lecture 14

12 Expenses accrued Rs. 15,000.


Expense Account Date Feb 01 Feb 03 Feb 28 02 12 No. Narration
Balance B/F Expenses payable reduced Expenses accrued

Code 01 Cr. Rs. Bal. Dr/(Cr) 20,000 5,000 15,000 30,000 Code 12 Cr. Rs. 20,000 Bal. Dr/(Cr) (20,000) (15,000)

Dr. Rs. 20,000 15,000 Expenses Accrued

Date Feb 01 Feb 03

No.

Narration
Balance B/F

Dr. Rs.

02

Expenses payable reduced

5,000

Feb 05
Feb 28 Feb 28

03
11 12

Expenses payable paid


Salaries Accrued Expenses accrued

15,000
5,000 15,000

0
(5,000) (20,000)

Financial Accounting

Lecture 14

Trial Balance

Ali Traders Trial Balance As On February 28, 20-Title of Account Cash Account Bank Account Capital Account Furniture Account Vehicle Account Purchases Account Mr. A (Creditor) Code 01 02 03 04 05 06 07 15,000 50,000 120,000 50,000 Dr. Rs. 99,000 40,000 200,000 Cr. Rs.

Financial Accounting

Lecture 14

Ali Traders Trial Balance As On February 28, 20-Title of Account Sales Mr. B (Debtor) Salaries Expenses Expenses Payable Discount Fixed deposit Total Code 08 09 10 11 12 13 14 1,000 75,000 460,000 460,000 20,000 10,000 30,000 20,000 Dr. Rs. Cr. Rs. 190,000

Financial Accounting

Lecture 14

Items purchased for own use of the business are charged as


expense, e.g. tube lights, bulbs, stationery etc.

Items

purchased for the purpose of resale are treated as Purchases.

Financial Accounting

Lecture 14

Stock

Stock is the quantity of unutilized or unsold goods lying with


the organization.

Financial Accounting

Lecture 14

Types of Stock

In case of Trading Concern (an organization that does not


manufacture goods and but resells the purchased goods.) Stock in Trade (Finished goods) In case of Manufacturing Concern (an organization that purchases material and converts into a finished product by putting it through a process). Raw Material Stock Work in Process Finished Goods Stock

Financial Accounting

Lecture 14

Stock Account

Stock

Account is Debited with the Value of the Goods Purchased.

Stock account is Credited with the Purchase Price of the


Goods Sold / Issued for Production.

Stock
goods.

Account shows the cost / purchase value of unsold

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Financial Accounting

Lecture 14

Purchase of Stock

Credit

Cash Account OR Supplier / Creditor Account

Debit

Stock Account

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Financial Accounting

Lecture 14

Payment to Creditors

Debit Credit

Supplier / Creditor Account

Cash Account

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Financial Accounting

Lecture 14

Sale of Goods

Credit Debit

Stock Account Cost of Goods Sold

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Financial Accounting

Lecture 14

+ + =

Opening Stock Purchases Value / Cost of Goods Sold Closing Stock

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Financial Accounting

Lecture 14

Cost of Goods Sold

Trading Concern
Purchase Price of the Goods Sold

Manufacturing Concern
+ + Cost of Raw Material Consumed Other Manufacturing Costs e.g. salaries of labour, cost of machinery

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Financial Accounting

Lecture 14

Stock & Cost of Goods Sold In Manufacturing Conc.


Raw Material Stock Other Costs Accounts

Work in Process Account

Finished Goods Account

Cost of Goods Sold Account

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