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(17)-EXAMPLE- TRIAL BALANCE AND PROFIT AND LOSS ACCOUNT

Monday, November 2, 2009

Example Trial Balance and Profit and Loss Account

One of the trading company prepared ledger books and find following balances as at 31 March 2009

Cash ------------------------------(Dr) 430
Bank ------------------------------(Dr) 192
Capital ----------------------------(Cr) 500
Rent -------------------------------(Dr) 60
Carriage ---------------------------(Dr) 46
Creditors --------------------------(Cr) 760
Debtors ----------------------------(Dr) 510
Purchases -------------------------(Dr) 918
Sales -------------------------------(Cr) 696
We prepare profit and loss account using income and expenses balances,


Profit and Loss Account
Sales -------------------------------------------------------------696
(-)Cost of sales (Purchases because no stocks) -----918
Gross profit ----------------------------------------------------(222)
(-) Expenses
Rents -------------------------------------------------------------(60)
Carriage --------------------------------------------------------(46)
Loss for the period -----------------------------------------(328)

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