Accounts Essay

822 WordsMay 4, 20124 Pages
Project For Accounting Presented by:Rishikesh Reedoy Form 4A Balance Sheet * A balance sheet is a financial statement which shows the financial position of a business at a particular date. * It consists of assets, liabilities, capital. * It is not an account rather a statement. * It is prepared not for a period but rather for a particular date. Debit & Credit Notes Debit `Debit` is a latin term. In latin debit mean to receive a benefit. It is always shown by the right hand side. Credit In the other hand the word `credit` is also a latin term but it means to give a benefit. It is normaly shown by the left hand side. Trading Account As its name indicates the trading account is an account which records all transaction relating to trade that is the buying of goods and services.The objective of this account is to calculate gross profit or gross loss.The main elements of a trading account include: Purchases Purchases returns Sales Return inwards Opening inventory Closing inventory Expenses relating to purchases Carriage on purchases Freights Import duties Non current assets The non current assets are: Intangible e.g. goodwill Tangibles e.g. motor car, plant and Machinery etc. Current assets Closing inventory Trade receivables (debtors) Cash at bank Cash in hand Liabilities sides Capital section Current liabilities: Trade payables (creditors) Bank overdraft Non current liabilities (long term liabilities) Loan from bank Mortgage on premises Working capital Working capital is a financial metric which represents operating liquidity available to a business, organization, or other entity, including governmental entity. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. Net working capital is calculated as current assets minus current

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