Q. 7. From the following Trial Balance and Adjustments given below, you are required to prepare Trading and Profit and Loss Account for the year ended on 31st March, 2016 and Balance Sheet as on that date of M/s Durgesh and Dinesh (partners sharing profits and losses equally): Trial Balance as on 31st March, 2016 | Debit Balance | Amount (₹) | Credit Balance | Amount (₹) | | --- | --- | --- | --- | | Opening stock | 9,000 | Capital A/c's: | | | Cash in hand | 1,200 | Durgesh | 17,500 | | Discount allowed | 450 | Dinesh | 17,500 | | Salaries | 650 | Sales | 23,600 | | Land and building | 25,000 | Sundry creditors | 14,500 | | Furniture | 9,000 | Bills payable | 3,500 | | Plant and machinery | 11,000 | Bank loan | 10,000 | | Sundry debtors | 12,500 | Discount received | 750 | | Interest paid | 425 | Purchase return | 1,100 | | Printing and stationary | 600 | | | | Purchases | 16,000 | | | | Wages | 1,400 | | | | Sales return | 900 | | | | Bad debts | 325 | | | | | 88,450 | | 88,450 | Adjustments: (1) The stock on hand on 31st March, 2016 was valued at ₹ 14,500. (2) Outstanding salary was ₹ 350. (3) Wages paid in advance to workers ₹ 600. (4) Depreciate land and building at 5% p.a. and plant and machinery at 10% p.a. (5) Write off ₹ 500 for further bad debts.

> > [!TLDR] > Trading Account gross profit is ₹ 12,500; after Profit and Loss items (including depreciation ₹ 2,350 and total bad debts ₹ 825) the Net Profit is ₹ 7,600, split equally ₹ 3,800 each. The Balance Sheet ties at ₹ 70,950. > > Working notes: > - Net purchases = 16,000 - 1,100 (purchase return) = ₹ 14,900; Net sales = 23,600 - 900 (sales return) = ₹ 22,700. > - Wages = 1,400 - 600 prepaid = ₹ 800 (₹ 600 shown as prepaid asset). > - Salaries = 650 + 350 outstanding = ₹ 1,000 (₹ 350 shown as a liability). > - Bad debts = 325 + 500 further = ₹ 825; debtors = 12,500 - 500 = ₹ 12,000. > - Depreciation: Land and building 25,000 x 5% = 1,250; Plant and machinery 11,000 x 10% = 1,100; total ₹ 2,350. (Furniture is not depreciated as no rate is given.) > > Trading and Profit and Loss Account for the year ended 31st March, 2016: > > | Particulars | Amount (₹) | Particulars | Amount (₹) | > | --- | --- | --- | --- | > | To Opening stock | 9,000 | By Sales 23,600 - Return 900 | 22,700 | > | To Purchases 16,000 - Return 1,100 | 14,900 | By Closing stock | 14,500 | > | To Wages 1,400 - Prepaid 600 | 800 | | | > | To Gross Profit c/d | 12,500 | | | > | | 37,200 | | 37,200 | > | To Discount allowed | 450 | By Gross Profit b/d | 12,500 | > | To Salaries 650 + Outstanding 350 | 1,000 | By Discount received | 750 | > | To Interest paid | 425 | | | > | To Printing and stationary | 600 | | | > | To Bad debts 325 + Further 500 | 825 | | | > | To Depreciation: Land and building 1,250 + Plant and machinery 1,100 | 2,350 | | | > | To Net Profit c/d (Durgesh 3,800, Dinesh 3,800) | 7,600 | | | > | | 13,250 | | 13,250 | > …

Q. 7. From the following Trial Balance and Adjustments given below, you are required to prepare Trading and Pr

Question 42 of 42

Q. 7. From the following Trial Balance and Adjustments given below, you are required to prepare Trading and Profit and Loss Account for the year ended on 31st March, 2016 and Balance Sheet as on that date of M/s Durgesh and Dinesh (partners sharing profits and losses equally):

Trial Balance as on 31st March, 2016

Debit Balance	Amount (₹)	Credit Balance	Amount (₹)
Opening stock	9,000	Capital A/c's:
Cash in hand	1,200	Durgesh	17,500
Discount allowed	450	Dinesh	17,500
Salaries	650	Sales	23,600
Land and building	25,000	Sundry creditors	14,500
Furniture	9,000	Bills payable	3,500
Plant and machinery	11,000	Bank loan	10,000
Sundry debtors	12,500	Discount received	750
Interest paid	425	Purchase return	1,100
Printing and stationary	600
Purchases	16,000
Wages	1,400
Sales return	900
Bad debts	325
	88,450		88,450

Adjustments:

(1) The stock on hand on 31st March, 2016 was valued at ₹ 14,500.

(2) Outstanding salary was ₹ 350.

(3) Wages paid in advance to workers ₹ 600.

(4) Depreciate land and building at 5% p.a. and plant and machinery at 10% p.a.

(5) Write off ₹ 500 for further bad debts.

Maharashtra MsbshseMaharashtra HSC (MSBSHSE) Board 2020Subjective· 15mImportance★★★★★

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Trading Account gross profit is ₹ 12,500; after Profit and Loss items (including depreciation ₹ 2,350 and total bad debts ₹ 825) the Net Profit is ₹ 7,600, split equally ₹ 3,800 each. The Balance Sheet ties at ₹ 70,950.

Working notes:

Net purchases = 16,000 - 1,100 (purchase return) = ₹ 14,900; Net sales = 23,600 - 900 (sales return) = ₹ 22,700.
Wages = 1,400 - 600 prepaid = ₹ 800 (₹ 600 shown as prepaid asset).
Salaries = 650 + 350 outstanding = ₹ 1,000 (₹ 350 shown as a liability).
Bad debts = 325 + 500 further = ₹ 825; debtors = 12,500 - 500 = ₹ 12,000.
Depreciation: Land and building 25,000 x 5% = 1,250; Plant and machinery 11,000 x 10% = 1,100; total ₹ 2,350. (Furniture is not depreciated as no rate is given.)

Trading and Profit and Loss Account for the year ended 31st March, 2016:

Particulars	Amount (₹)	Particulars	Amount (₹)
To Opening stock	9,000	By Sales 23,600 - Return 900	22,700
To Purchases 16,000 - Return 1,100	14,900	By Closing stock	14,500
To Wages 1,400 - Prepaid 600	800
To Gross Profit c/d	12,500
	37,200		37,200
To Discount allowed	450	By Gross Profit b/d	12,500
To Salaries 650 + Outstanding 350	1,000	By Discount received	750
To Interest paid	425
To Printing and stationary	600
To Bad debts 325 + Further 500	825
To Depreciation: Land and building 1,250 + Plant and machinery 1,100	2,350
To Net Profit c/d (Durgesh 3,800, Dinesh 3,800)	7,600
	13,250		13,250
…

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CBSE 2026Set ANNUAL1 mark
$Q. Complete the table: Sales Purchases Gross Profit ........ 1,80,000 20,000$
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Method

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CBSE 2026Set ANNUAL1 mark
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Expenses paid before their due date are called Prepaid Expenses (expenses paid in advance).

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Sales	Purchases	Gross Profit
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Q. Trading Account is prepared on the basis of ______ expenses.

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The missing word is Direct.

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Expense type	Where recorded	Examples
Direct (incurred to bring goods to saleable condition)	Trading Account	Wages, carriage inward, freight, import duty, factory power
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The odd one is the Salary account.

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Item Nature Recorded in
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Royalty account Direct expense Trading A/c
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Item	Nature	Recorded in
Wages account	Direct expense	Trading A/c
Royalty account	Direct expense	Trading A/c
Import duty account	Direct expense	Trading A/c
Salary account	Indirect expense	Profit & Loss A/c
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The odd one is the Rent account.

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Item	Nature	Shown in
Machinery account	Fixed asset	Balance Sheet (Assets)
Furniture account	Fixed asset	Balance Sheet (Assets)
Computer account	Fixed asset	Balance Sheet (Assets)
Rent account	Expense (nominal)	Profit & Loss A/c
…

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CBSE 2025Set ANNUAL1 markMCQ

Q. Find the odd one:

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Group the four accounts by where they appear in the books. Three of them are liabilities/owners' claims; only Machinery account is an asset, so it is the odd one out.

Classifying each item

Item	Nature	Side of Balance Sheet
General Reserve account	Accumulated profit (owners' fund)	Liabilities side
Creditors account	Liability (amount owed to suppliers)	Liabilities side
Machinery account	Fixed / real asset	Assets side
Capital account	Owners' fund	Liabilities side

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CBSE 2024Set ANNUAL1 markMCQ
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Three of the items are assets; one is a liability. The liability is the odd one.

When the items are placed in a Balance Sheet they split cleanly:

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Building Fixed asset Assets
Machinery Fixed asset Assets
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…

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CBSE 2024Set ANNUAL1 markMCQ
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Three items appear on the liabilities side of the Balance Sheet; one is an asset. The asset is the odd one.

Sorting the four items into a Balance Sheet:

Item Nature Balance Sheet side
General Reserve Accumulated profit (owners' fund) Liabilities
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$Q. Write the word/phrase/term, which can substitute the following sentence. Credit balance of Profit and Loss Account.$
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A credit balance in the Profit and Loss Account means the total of the credit side (incomes/gains) is greater than the debit side (expenses/losses) — the term for it is Net Profit.

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$Q. Calculate 12.5% P.A. depreciation on Furniture: on ₹ 2,20,000 for 1 year on ₹ 10,000 for 6 months$
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2,20,000 12.5% p.a. 1 year (12/12) 27,500
10,000 12.5% p.a. 6 months (6/12) 625

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The Profit & Loss Account is the account prepared to ascertain the Net Profit or Net Loss.

The question tests where the net result of a business is determined among the final accounts.

Trading Account deals only with direct items (opening/closing stock, purchases, sales, direct expenses) and gives the Gross Profit or Gross Loss.

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Item	Nature	Balance Sheet side
Building	Fixed asset	Assets
Machinery	Fixed asset	Assets
Furniture	Fixed asset	Assets
Bills Payable	Current liability	Liabilities
…

Item	Nature	Balance Sheet side
General Reserve	Accumulated profit (owners' fund)	Liabilities
Creditors	Current liability	Liabilities
Capital	Owners' fund	Liabilities
Investments	Asset	Assets
…

Amount (₹)	Rate	Period	Depreciation (₹)
2,20,000	12.5% p.a.	1 year (12/12)	27,500
10,000	12.5% p.a.	6 months (6/12)	625

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