Financial Statement Of Sole Proprietorship | Accounts Class 11

COMPONENT OF FINANCIAL STATEMENT

Question 1 :

Financial Statement includes __________.

TREATMENT OF CAPITAL EXPENDITURE

Question 2 :

Amount paid for the acquisition of Building would be ————?

Explanation:

Since amount is paid for the acquisition of Building ,which is a capital assets, such amount would be added (Debited) to the Cost of Building .




DETERMINING-GROSS PROFIT

Question 3 :

From the following information you are required to ascertain gross profit.
Purchases 1050000
Return Inwards 20000
Sales 1260000
Return Outwards 10000
Direct Expenses 3000
Rent 10000

Explanation:

Gross Profit = Sales (-) Purchases (-) Direct Expenses
1240000 (-) 1040000 (-) 3000
197000

Working note 1: Net Purchases= Purchases (-) Return Outwards
Net Purchases= 1050000 (-) 10000
Net Purchases= 1040000

Working note 2: Net Sales= Sales (-) Return Inwards
Net Sales= 1260000 (-) 20000
Net Sales= 1240000

Note: Since Rent is an indirect expenes therefore it would be transferred to Profit and Loss account instead of Trading account.

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1 thought on “Financial Statement Of Sole Proprietorship | Accounts Class 11”

  1. Aha, its very nice, You have such a nice question bank of each and every topic or can be said that topic wise, the student can easily go through all the question of every topic and can clear his /her doubts. such a wonderful job u has done

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