Profit and Loss and Balance Sheet

From Trial Balalace

With Charts of Account

PREPARED BY ANDLEEB AMEERI

GROUP IN : HIMAYAT ULLAH AND ANDALEEB
 OPERATING CYLCE OF MERCHANDISE
COMPANY

 The series of transactions through which a business

generates its revenue and its cash receipts from customers
in operating cycle.

PREPARED BY ANDLEEB AMEERI

 OPERATING CYLCE OF MERCHANDISE
COMPANY

Series of Transaction

1. Purchase of Merchandise
2. Sale of Merchandise on Account
3. Collection of Receivables

PREPARED BY ANDLEEB AMEERI

 T R I A L B A LA N C E

Definition
 The balance taken from the ledgers are written in to two column
statement, which is called as Trial Balance .

 It is consist of all accounting records and their balances as they

appear in the ledger.

 The debit balance of ledger accounts are inserted on debit side

of the Trial balance and credit balance of ledger accounts on the
credit side of the Trial Balance.

 The Trail Balance is prepared to prove the accuracy of the record.

PREPARED BY ANDLEEB AMEERI

 T R I A L B A LA N C E
Description Ref Debit Balance Description Ref Credit Balance
Machinery Afg 21,600.00 Accounts Payable Afg 680.00
Notes Receivable Afg 690.00 Notes Payable Afg 6,000.00
Bank Account Afg 3,151.00 Discount Received Afg 627.00
Selling Salaries Afg 1,910.00 Sales Afg 11,439.00
Purchases Afg 6,284.00 Capital Afg 18,390.00
Drawings Afg 350.00 Purchase Return Afg 350.00
Carriage in Afg 500.00 Mortgage Loan Afg 3,000.00
Office Salaries Afg 1,200.00
Insurance Exp Afg 219.00
Postage Exp Afg 232.00
Advertisements Afg 360.00
Office Supplies Exp Afg 130.00
Rent Afg 110.00
Sales Returns Afg 350.00
Investments Afg 2,000.00
Furniture Afg 1,400.00
Total Afg 40,486.00 Total Afg 40,486.00

PREPARED BY ANDLEEB AMEERI

 INCOME STATEMENT

 This is a device to calculate the Net Income or loss suffered

at the end of particular period.
 The period of time may be different indifferent organizations.
 Some prepare at the end of every month , some may prepare
quarterly , some annually . Generally it is prepared at the end of
every accounting year.

PREPARED BY ANDLEEB AMEERI

 INCOME STATEMENT
LIAQAT AND SHOUKAT
INCOME STATEMENT
For the year Ended on 31 December, 2005
Afg Afg Afg
Revenue From Sales xxx
-Sales Return xxx
Net Sales xxx
Cost of Goods Sold
+ Purchases xxx
- Purcahes Return xxx
Net Purchases xxx
-Carrige Exp xxx
Cost of Goods Sold (xxx)
Gross Profit
Less : Operative Exp
Selling Exp xxx
Advertisement Exp xxx
Offi ce Salaries xxx
Postal Expenses xxx
Offi ce Supplies Exp xxx
Rent Exp xxx
Insurance Exp xxx
Total Operative Exp (xxxx)
Add : Other Income
Discount Received xxx
Net Income

PREPARED BY ANDLEEB AMEERI

 B A LA N C E S H E E T

 Balance sheet is a device which is used to show the financial position

Of a business
 In balance sheet we record all the assets owned by the business on
 One side , and liabilities and capital on the other side . Both sides Of
the balance sheet is always in agreement.

PREPARED BY ANDLEEB AMEERI