Beruflich Dokumente
Kultur Dokumente
Revenue Equation
Capital Revenue
long term benefits Short term benefits
More than one year Less than one year
Appears on asset side Appears on debit side
of Balance Sheet of Profit and loss
account
Capital Expenditure takes place only
when the following two conditions
are satisfied :
1. The ownership is established with
documentary evidence or otherwise.
2. The owner has been given the
possession of the asset.
The payment has nothing to do with
the incurrence of capital expenditure;
whether payment is made or not .
Revenue Expenditure :
Revenue expenditure takes place
when the benefit of the expenditure is
exhausted, consumed, used up,
finished or over within a given period
not exceeding one year.
Capital Expenditure
Land
Buildings
Plant and Machinery
Furniture
Office Equipments
Vehicles
Goodwill
Patent/Copyrights
Revenue Cost
Authorized Capital
Issued Capital
Subscribed Capital
Called up Capital
Less Calls in Arrears
Add shares forfeited
2.Reserves and Surplus
General Reserve
Capital Reserve
Capital Redemption Reserve
Share Premium Account
Other Reserves
P and L Appropriation Account
3.Secured Loans
Debentures
Other Secured Loans
4.Unsecured Loans
Fixed Deposits
Short Term Loans and
Advances
Current Liabilities and Provisions
A - Current Liabilities
Creditors for supplies
Bill Payable
Unclaimed Dividend
B - Provisions
Provision for Taxation
Proposed Dividend
Other Provisions
FIXED ASSETS
Goodwill
Land and Building
Plant and Machinery
Furniture
Office Equipments
Motor Vehicles
2. Investments
In Govt. Securities
Preliminary Expenses
Underwriting Commission
Discount on Shares and
Debentures
Profit and Loss A/c (Dr.)
Vertical Form
Name of the Company…………
Balance Sheet at as ………..
I. Sources of Funds
(1) Shareholders Funds
(a) Capital
(b) Reserves and Surplus
(2) Loan Funds :
(a) Secured Loans
(b) Unsecured Loans
Total
II. Applications of Funds
(1) Fixed Assets :
(a) Gross Block
(b) Less Depreciation
(c) Net Block
(d) Capital Work-in Progress
(2) Investments
Vertical Form
Name of the Company…………
Balance Sheet at as ………..
Total
Vertical Form
Profit and Loss A/c for the year ending ………………
Amount
Rs.
Sales ………………
Material Consumed :
………………
Treatment of Revenue Expenditure
Paid
Revenue Expenditure
Capital Expenditure
Revenue Expenditure
Liability
Not Paid appears on the
liabilities
side of B/S
Appears on the expenses
side of Profit and Loss A/c
Treatment of Revenue Expenditure
Paid
Reduces Cash/
Bank Balance
Revenue Expenditure
Liability
Not Paid appears on the
liabilities
side of B/S
Appears on the expenses
side of Profit and Loss A/c
Treatment of Capital Expenditure
Paid
Reduces Cash/
Bank Balance
Capital Expenditure
Liability
Not Paid appears on the
liabilities
side of B/S
Appears on the asset side of
Balance Sheet
Treatment for Advance Payments
Reduces Cash/
Bank Balance
Capital introduced by
Owners/Shareholders
Appears on the
liabilities side of
Balance Sheet
Loan Availed
Asset appears
at asset value on
the asset side of
B/s
Reduces
Cash/Bank
balance
Repayment of
Loan/Outstanding
expenses
Reduces the
liability item on
liabilities side of
B/s
Chart Showing Capital
Employed and Net Worth
Net Worth Equity Share Capital
Contribution EBIT
EBIT EBT
Tax on Income
Profit
(EBIT) Dividend
Retained Earnings
Working Capital :
Current Assets – Current Liabilities
Debtors/
Cash
Receivables
Finished
Creditors
goods
Work in
Raw Materials
progress
Working capital should be adequate
enough to enable the concern to achieve its
targeted production and sales. It should be
sufficient enough (not more or not less) to
meet the needs of business.
Gross Profit
= X 100
Sales
Net Profit
= X 100
Sales
Current Assets
=
Current Liabilities
Debtors
= x 365 days/ 12 months/
52 weeks
Credit Sales
Creditors
= x 365 days/ 12 months/
52 weeks
Credit Purchases
Debt
=
Equity
Turnover
=
Fixed Assets