PROJECT REPORT ON FINAL ACCOUNTS

in the subject of “ ACCOUNTANCY”.

NAME OF THE H.S.S : Belpahar Higher Secondary School.

NAME OF THE STUDENT : Vaishali Agrawal.

CLASS : +2nd year Commerce

CHSE ROLL.NO : IC18-006

REGD.NO. :

ACADEMIC YEAR : 2019-20

GUIDE NAME : SRI. SURENDRA KUMAR BHOI

(Lecturer in commerce)

MARKS AWARDED

Signature of Signature of

External Examiner Internal Examiner

1
 AcknowledgemenT
I am extremely greatful to my Teacher
Mr. Surendra Kumar Bhoi, lecturer in
commerce, for his able guidance and
useful suggestions which helped me in
timely completion of this project.

NAME: VAISHALI AGRAWAL

ROLL NO: ICI8-006

2
 Certificate

This is to certify that Miss.Vaishali Agrawal of +2nd

year commerce, Belpahar Higher Secondary School
has successfully completed her project work in the
subject of Accountany under my supervision. She
has taken proper care and shown utmost sincerity in
completion of this project .I certify that this project
is upto my expectation and as per the guidance
issued by CHSE.

________
(Signature)

3
 Contents

 Concept Of Accounting
 Introduction Of The Topic
 About Final Accounts
 journal
 Ledger
 Trial Balance
 Trading and Profit & Loss a/c
 Balancesheet
 Computation Of Final Accounts
 Profitability Ratio
 Findings
 Conclusion
 Bibliography
Concept Of Accounting
4
The project is based to analyse the financial and
profitability position of the businessand also its strength
and weaknesses for the year 2018-19.The information are
collected from secondary sources. Final accounts give an
idea about the profitability and financial position of a
business to its management, owners, and other interested
parties. Trading account is prepared mainly to know the
profitability on account of goods purchased and sold by
the business concern. The profit and loss account is then
prepared with a view to ascertaining netprofit or net loss
and lastly the balance sheet is a classified summary of
accounts balances remaining open in the ledger after the
nominal accounts relating to incomes and expenses have
been closed by transferring either to the trading account
or profit and loss account.

Introduction to the topic

5
 Fin
al accounts give an idea about the profitability and
financial position of a business to its management,
owners, and other interested parties. Financial statements
or final accounts, generally refer to two statements, viz.
(1) Income Statement or Profit and Loss Account and
(2) Position Statement or Balance Sheet, prepared at the
end of every accounting year.
The income statement or profit and loss account is
prepared to ascertain the results of the business
6
operations, called net profit or net loss of the business for
an accounting year. The Position statement or balance
sheet is prepared to know the assets, liabilities and
owner's capital of a business at the end of every
accounting period. These two statements are called
financial statements of final account, because they are
prepared finally at the end of the trading period, and show
the financial or final result of the business. The analysis
depends on the objective of the study. In present the
information about a business is taken for analysing and
evaluating its financial position and profitability position
for the year 2018- 19 which will help the business to form
an opinion about the progress of the business. The
information of the business is journalised and posted into
ledger and a trial balance is then prepared from its
balances. Paper also aims to analyse the financial and
profitability position of the business.

Objective of the study

7
 To analize the financial and profitability position of
the business and also its strenghts and weakness for
the year 2018-19.

 It also deposits expenses, incomes, profit&loss ,

assests and liabilities.

Sources of data collection

 The information collected for present study is
secoundary.

 The informations are collected from various

books , journals, websites etc.

8
 Importance of the study
The most important benefit of preparing final account is
to know the profitability of the concern, to know the total
incomes and expenses and the revised value of fixed
assets. The Profit and Loss account is to ascertain the net
profit or net loss of the business and balance sheet is
preparedto know the financial condition of the business
for an accounting year.

Limitation of the study:

➢ Primary data is missing.

➢ Study is for a limited time period .

ABOUT FINAL ACCOUNTS

9
After the preparation of Journal, Ledger and
TrialBalance,the trader wants to know the trading results
of the business. For this purpose, the Businessman
prepares financial statement of the business i.e., the
trading and profit & loss account and balance sheet at the
end of the accounting period. These financial statements
are popularly known as final account or financial
statement. In order to ascertain the profit or loss of the
business, a business concern has to prepare an account
called “Profit & Loss account”. The profit and loss
account is usually divided into two sections, viz.
(1) Trading account.
(2) Profit and Loss account.
Trading account is prepared for ascertaining the gross
profit or gross loss of the business for an accounting
period. In other words, it is prepared mainly to know the
profitability on account of goods purchased and sold by
the business concern. Every Businessman is interested in
knowing the net profit. The net profit is his income, which
increases his capital so after preparing the Trading
account, the next step is to prepare the profit and loss
account with a view to ascertaining net profit or net loss
during an accounting period. Lastly it comes the Balance
10
Sheet or Position Statement. The balance sheet is a
classified summary of accounts balances remaining open
in the ledger after the nominal accounts relating to
incomes and expenses have been closed by transferring
either to the trading account or profit and loss account.
This statement is prepared to know the financial status of
the business concern. The capital and liabilities of the
business are shown on the left hand side, whereas assets
and other items of debit balance are shown on the right
hand side.

Journal
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 Meaning:- It is a book of primary entry where
transactions are recorded in order of data from a
memorandum.
 Defination:- “The journal is the primary
book of keeping accounts. The book wherein the
transactions are recorded in a chronological order of
dates after determining the debit&credit accounts.
 Objectives :-
 Journal is prepared to keep a systematic record
of financial transactions in chronological order.
 It is prepared to present necessary information
about the financial transactions.
 It is prepared to facilitate the preparation of
ledger.

 Features :
 It is a book of original entry because
transactions are recorded at first stage in this
book.
 The journal is only a subsidiary book.

Ledger

12
 Meaning :- Ledger is a book cointaining
accounts in which the classified and summarized
information from the journal is posted as ledger.
 Defination:- “Ledger is a book of accounts
which cointains a suitably classified forms,the final
and permanent record of traders transactions.
 Objectives:-
 To provide classified financial information.
 To provide check on arithmetical accuracy
 It helps to ascertain profit&loss a/c.
 Features :-
 The transactions are classified under
appropriate heads called account.
 The a/c cointains summarized record of all
the related transactions.
 It is the basis for preparing final a/c
 The information cointained in ledger can be
used to draw the conclusion.

TRiAL BALANce
13
 Meaning :-A list of debit and credit balances taken
from ledger and placed in a statement isknown as
 Defination:- “ The statement prepared with the
help of ledger balances,at the end of the year to find
out whether debit total agrees with credit total ,is
called Trial balance”.
 Objectives:-
 To ascertain the arithematical accuracy od ledger
a/c.
 Help in completion of double entry.
 Help in preparation of final accounts.
 Features:-
 It is just a statement and not an account.
 It is a list of balances of all ledger a/c and
cashbook
 It is prepared to check the arithmatical accuracy.
 The total of debit and credit amount columns of
trial balance must tally.

Trading account

14
Meaning:-The trading a/c shows the result of buying
and selling of goods,ie ,it shows the the gross profit
earned or the gross loss incurred through purchases and
sales of the year.

Objectives:-
 To determine the gross profit andloss of the bussiness
which is the difference between net sales and cost of
goods sold.
 To provide information about the direct expenses that
are incurred on the purchase and manufacturing of
goods.
 To study ratio of gross profit and if it shows a
decreasing trends,then take steps to safeguard against
it.

Features:-
 It serves the first step in preparating financial
statement.
 It exhibits value of direct sales and direct cost of
goods sold.
PROFIT AND LOSS ACCOUNTS

15
Meaning:- Profit&loss account is an account prepared
to ascertain the net profit earned or net loss incurred
during an accounting period. Profit&loss account is a
nominal account.

Defination:-“Profit&loss account is an account into

which all gain and loss are collected in order to ascertain
the excess of gain over the loss or vice versa.

Objectives:-
 To ascertain the netprofit earned or net loss suffered
during a particular period.
 To facilitates comparsion with previous years and
access the efficiency of operations.

Features:-
 Prepared on accural basis.
 Balances of profit&loss account.
 Derives constituents from trading accounts.

Balance sheet
16
Meaning:- A balancesheet is a statement that shows
the financial position of a business at a particular point of
time.

Definition:-“Balancesheet is a statement which

reports the property value owned by the enterprise and the
claim of the creditors and owner against the properties. It
shows the status of the business as at a given moment of
time, in so far as a counting of figures can show its
status”.

Objectives:-
 To determine the true financial position of business at
a particular point of time.
 To ascertain nature, value and costs of various assests
involved in the business

Features:-
 Part of financial statement.
 Summary of accounts.
 Equality of both side.
About the Business
17
Mr.Manpreet decided to start a business dealing with
Furniture named “Fine Furniture ltd.”on 1st april 2018
with capital 400000. He purchased furniture worth Rs.
1,00,000 and for purchased motor vehicle for 61200, later
10000 depreciation were provided on furniture and 1200
on motor vehicle. he took a loan of Rs.1,00,000 from
Bank. The bank approved the loan at a rate of 8% per
annum amounting to Rs. 8,000.
On 31st july, 2018 he invested Rs.20,000 and provided
interest on investment for Rs.6000 He withdrew Rs.10000
per month (10000*12).He made a total purchases of
Rs.400000 and sales of Rs.551400.
On 1st january all the expenses were paid by bank that
comprised with :-
Carraige- 6000 Rent-24000
Wages-4000 interst-8000
Carraige outward-8000 commission-2500
Salaries-40000 electric charges-2000
And sundry expenses 1500 and the amount to be received
and paid from debtors and creditors amounted to 25000

18
and 1200 respectively , At the end of the year baddedts on
sundry debtors were Rs.5000,provision for bad dedts was
5% and closing stock amounted Rs.20000.

19
 JOURNAL

DATE PARTICULAR L.F DEBIT Credit amount

amount (RS)
2018 (RS)

1st APRIL Cash a/c Dr 4,00,000

To Capital a/c 4,00,000
( Being capital invested in
business)
2nd APRIL
Bank a/c Dr 3,90,000
To Cash a/c 3,90,000
(BEING amount deposited into
bank )

1st MAY BANK a/c Dr 1,00,000

TO Bank Loan a/c 1,00,000
(Being loan taken from ICIC
banks )

1st MAY Furniture a/c Dr 1,00,000

2016 1,00,000
To Bank a/c
(Being furniture purchased )

1st JUNE Motor vechile a/c Dr 61,200

2018 61,200
To Bank a/c
(Being motor vechile
purchased )

31st JULY Investment a/c Dr 2,00,000

2018 To Bank a/c 2,00,000
(Being invested 2,00,000 )
31st AUG
2016 Purchase a/c Dr 4,00,000

20
 To bank a/c 4,00,000
( Being total purchase for the
30th SEP year )
2018 Bank a/c Dr 5,51,400 5,51,400
To Sales a/c
( Bring total sales made during
the year )
31st JAN
2019 Carraige inward a/c Dr 6000
Wages a/c Dr 4000
Carraige outward a/c Dr 8000
Salaries a/c Dr 40,000
Rent a/c Dr 24,000
Intrest a/c Dr 8000
Commission a/c Dr 2500
Electricity charges a/c Dr 2000
Sundary expenses a/c Dr 2000
To Bank a/c 16,000
( Being expenses paid )

2nd JAN Bank a/c Dr 6000

2019 To Intrest a/c 6000
( Being intrest received )

4TH FEB Debtors a/c Dr

25,000
2019 To Bank a/c
25,000
( Being amount due on debtors )

9th FEB Bank a/c Dr

12,000
2019 To Creditor a/c
12,000
( Being amount due from
creditors )

3rd FEB Drawing a/c Dr

1,20,000
2019 To Bank a/c
1,20,000
( Being amount withdraw for
personal use )

21
27th FEB Prepaid insurance a/c Dr
2019 To Salaries a/c 4000
( Being salaries paid in 4000
advance )

Depriciation a/c Dr
1st MAR To Furniture a/c 11,200
2019 To Motor vechile a/c 10,000
( Being depriation provided ) 1,200

Bad debts a/c Dr

st
21 MAR To Sundary debtors 5,000
2019 ( Being bad debts for RS 5000 ) 5,000

Profit and loss a/c Dr

st
21 MAR To Provision for bad debts 100
2019 ( Being received provision for 100
bad debts at 2% )

Closing stock a/c Dr

st
31 MAR To Purchase a/c 20,000
2019 ( Being closing stock at the end 20,000
of the year )

22
 LEDGER
Dr cash account CR

Date Particular J Amount Date Particular J Amount

f f
1st Apr 2nd
2018 To capital a/c 4,00,000 Apr By Bank a/c 4,00,000
2018
31st
Mar
2109 By balance c/d 1,00,000

4,00,000 4,00,000
st
1
Apr To balance 1,00,000
2019 b/d

Dr Capital a/c Cr

Date Particular J Amount Date Particular J Amount

f f
31st 1st
Mar To balance c/d 4,00,000 Apr By Cash a/c 4,00,000
2019 2018
4,00,000 4,00,000

1st
Apr By balance b/d 4,00,000
2019

23
Dr Bank loan a/c Cr

Date Particular J Amount Date Particular J Amount

f f
31st 1st May
Mar To balance c/d 27,000 2018 By Bank loan a/c 1,00,000
2019

1,00,000 1,00,000
st
1 Apr
2019 By balance b/d 1,00,000

Dr Bank a/c Cr

Date Particular J Amount Date Particular J Amount

f f
2018 2018
2nd AprTo Cash a/c 3,90,000 1st May By Furnitue 1,00,000
1st MayTo Bank loan 1,00,000 a/c
a/c 1st June By Motor 60,000
th
30 Sep To Sales a/c 5,51,400 vechile a/c
31st July By Inventories 2,00,000
a/c
st
31 Aug By Purchase 4,00,000
a/c
2019 2019
2ND Jan To Intrest 1st Jan By Carriage
received a/c 6000 inward a/c 6000
th
7 Feb To Creditors By Wages a/c 4000
a/c 12,000 By Carraige
outward a/c 8000
24
 By Salaries a/c 40,000
By Rent a/c 24,000
By Intrest a/c 8000
By
commission
a/c 25000
By electricity
a/c 2000
By Sundary
expenses a/c 1500
th
4 Feb By Debtors
a/c 25,000
13th Feb By Drawing
a/c 1,20,000
1059400

1st Apr
Dr. FURNITURE cr.

Date Particular J Amount Date Particular J Amount

f f
1st
1st May To bank a/c 100000 Mar By
2018 2019 Depriciation 1,00,000
a/c
31st
Mar By balance
2019 c/d 9,00,000
100000 1000000
st
1 Apr 9,00,000
2019
Dr Motor vechile a/c Cr
25
Date Particular J Amount Date Particular J Amount
f f
1st 1st Mar
june To Bank a/c 61200 2019 By Depreciation 1200
2018 31st a/c
Mar By balance c/d 60,000
2019

To balance b/d 61,200 61,200

2018
Apr 1 60,000

Dr Investment a/c Cr

Date Particular J Amount Date Particular J Amount

f f
31st 31st
July To Bank a/c 2,00,000 Mar By balance c/d 2,00000
2018 2019

1st 2,00,000 2,00000

Apr
2019 To balance b/d 2,00,000

Dr Purchase a/c Cr

26
Date Particular J Amount Date Particular J Amount
f f
31st Aug 31st
2018 To bank a/c 4,00,000 Mar By Closing stock 20,000
2019 a/c
31st
Mar 3,80,000
2019
4,00,000 4,00,000

Dr Sales a/c Cr

Date Particular J Amount Date Particular J Amount

f f
30th
4,32,000 Sep By Bank a/c 5,51,400
2018
16,68,000

5,51,400 5,51,400

31st
Mar To Trading 5,51,400
2019 a/c

Dr Carriage inward a/c Cr

Date Particular J Amount Date Particular J Amount

27
 f f
st st
1 31 Mar
Jan To Bank a/c 6,000 2019 By Trading a/c 6,000
2019

6,000 6,000

Dr Wages a/c Cr

Date Particular J Amount Date Particular J Amount

f f
1st Jan
2019 To bank a/c 4000
31st
Mar By Trading a/c 4,000
2019

4,000 4,000

Dr Carraige outward a/c Cr

Date Particular J Amount Date Particular J Amount

28
 f f
st st
1 Jan 31
2019 To bank a/c 8,000 Jan By Profit and 8,000
2019 loss a/c
8,000 8,000

Dr Salaries a/c Cr

Date J Amount Date Particular J Amount

f f
Particular
1st Jan 40,000 27th Feb By Prepaid
2019 2019 salary a/c 1,89,000
3st Mar
2019 By Profit and 36.000
loss a/c
40,000 40,000

Dr Rent a/c Cr

Date Particular J Amount Date Particular J Amount

f f
1st Jan 31st
2019 To Bank a/c 24,000 Mar By profit and
2019 loss a/c 24,000

24,000 24,000

Dr Intrest a/c Cr

Date Particular J Amount Date Particular J Amount

29
 f f
2018 2018
Mar 31 To Bank a/c 8,000 Mar 31 By profit
and loss a/c 8,000

8,000 8,000

Dr Commission a/c Cr

Date Particular J Amount Date Particular J Amount

f f
1st Jan 2018
2019 To Bank a/c 2500 Mar 31 By Profit and
loss a/c 2500

2500 2500

Dr Electricity charges a/c Cr

30
Date Particular J Amount Date Particular J Amount
f f
1st Jan 31st
2019 To Bank a/c 2000 Mar By profit and
2019 loss a/c 2000

2000 2,000

Dr Sundary expenses a/c Cr

Date Particular J Amount Date Particular J Amount

f f
1st Jan 31st
2019 To Bank a/c 1500 Mar By profit and
2019 loss a/c 1500

1500 1500

Dr Investment received a/c Cr

Date Particular J Amount Date Particular J Amount

f f
1st Jan 31st
2019 To Bank a/c 6,000 Mar By Profit loss
2019 a/c 6,000

6,000 6,000

Dr Debtors a/c Cr

31
Date Particular J Amount Date Particular J Amount
f f
4th Feb 31st
2019 To Bank a/c 25,000 Mar By Bad debts
2019 a/c 5,000
31st
Mar By balance c/d 20,000
2019

25,000 25,000

1st Apr
2019 To balance b/d 20,000

Dr Creditors a/c Cr

Date Particular J Amount Date Particular J Amount

f f
31st 9th Feb
Mar To balance a/c 12,000 2019 By Bank a/c 12,000
2019

12,000 12,000

1st Apr By balance b/d 12000

2019

Dr Drawing a/c Cr

32
Date Particular J Amount Date Particular J Amount
f f
31st Mar 31st
2019 To Bank 1,20,00 Mar By balance a/c 1,20,000
0 2019

1,20,00 1,20,000
st
1 Apr 0
2019 To balance
b/d
1,20,00
0

Dr Prepaid salaries a/c Cr

Date Particular J Amount Date Particular J Amount

f f
2018 31st
Mar 31 To Salaries a/c 4000 Mar By Profit and 4000
4000 2019 loss a/c 4000

Dr Depriciation a/c Cr

33
 Date Particular J Amount Date Particular J Amount
f f
1st Mar 31st
2019 To Furnitre a/c Mar By Profit and
To Motor 2019 loss a/c 11,200
vechile a/c
11,200 11,200

Dr Bad debts a/c Cr

Date Particular J Amount Date Particular J Amount

f f
31st 31st
Mar To Sundary Mar By Profit and loss 5,000
2019 debtors a/c 5,000 2019 a/c

5,000 5,000

Dr Closing stock a/c Cr

34
Date Particular J Amoun Date Particular J Amount
F t f
31st 31 st

Mar To Purchase a/c 20,000 Mar By balance c/d 20,000

2019 2019

20,000 20,000
st
1 Apr
2019 To balnce b/d 20,000

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 TRIAL BALANCE

PARTICULAR Amount PARTICULAR AMOUNT

Cash a/c 10,000 Capital a/c 4,00,000

Bank a/c 58,400 Bank loan a/c 1,00,000
Furniture a/c 90,000 Provision for bad debts a/c 100
Motor vechile a/c 60,000 Intrest received a/c 6,000
Purchase a/c 3,80,000 Creditors a/c 12,000
Drawing a/c 1,20,000 Sales a/c 53,100
Investment a/c 2,00,000
Debtors a/c 20,000
Carraige inward a/c 6000
Bad debts a/c 5000
Wages a/c 4000
Salaries a/c 3,68,000
Intrest a/c 8000
Rent a/c 24,000
Commission a/c 2500
Electricity charge a/c 2000
Closing stock a/c 20,000
Prepaid salaries a/c 4000
Depriciation a/c 11,200
Carraige outward a/c 8000

10,69,50 10,69,500
0

36
 TRADING AND P/L ACCOUNT OF MR.MANPREET

Particular Amount Particular Amount

To Purchase a/c 3,80,000 By Sales a/c 5,51,400

To Wages a/c 4,000
To Carraige inward a/c 6,000

5,51,400 5,51,400

By Gross profit a/c 1,61,400

To Carraige outward a/c 8000 By Intrest recieved a/c 6,000
To Bad debts a/c 6000
To Salaries a/c 30,000
To Intrest a/c 8,000
To Rent a/c 24,000
To Commission a/c 2500
To Electricity charges a/c 2000
To Provision for bad debts
a/c 100
To Depriciation a/c 31,200

To Net profit 70,600

1,67,400 1,67,400

BALANCESHEET OF MR.MANPREET
37
 Liabilites Amount Assets Amount

Capital – 4,00,000 Furniture a/c 90,000

Less Drawing -1,20,000 Motor vechile a/c 60,000
Add Net profit – 70,600 3,50,600 Investment a/c 2,00,000
Debtors a/c
Bank loan a/c 1,00,000 ( 20,000 – 100 ) 19,900
Creditors a/c 1,20,000 Closing stock a/c 20,000
Cash a/c 10,000
Prepaid salaries a/c 4000
Bank a/c 58,100

4,62,600 4,62,600

profitablity ratio
38
 Gross profit
Gross profit Ratio = Net sales ×100
161400
= 551400 ×100 = 29.28

net profit
Net Profit Ratio = net sales ×100
70600
= 551400 ×100 = 12.80

ITEMS AMOUNT
ASSESTS 462600
LIABILITIES 112000
NET PROFIT 70600
EXPENSES 106800
(carraige,wages,carraige,salaries,rent,
Intrrest,commission,electricity,bad
debts etc)
INCOMES 6000

39
 income
1%

expenses
14%

net profit
9%

liabilities assests
15% 61%

FINDINGS
From the above computation of final
accounts, it is found that the Net profit amounted to Rs.
70600, so the financial position of the business is very
good. Gross Profit ratio and Net Profit ratio amounted to
29.28% and 12.80% respectively.

Conclusion

40
After conducting a detailed study on position of manpreet
business I have computed and analyzed all the relevant
information collected and compiled it into a shape of Project.
Here in this chapter, I have made an attempt to draw meaningful
conclusions.
The present study focuses to analyse the financial and
profitability position of the business. Various accounting process
were done for calculating it's financial and profitability position.
Data were recorded in Journal, then transferred to Ledger and
Trial Balance were prepared from ledger account balances.
Lastly the Trading and Profit & Loss Account and Balance
Sheet were prepared. The data were collected from secondary
sources only.
The Net Profit amounted to Rs. 70600 and Gross Profit
amounted to Rs. 161400. Net Profit ratio and Gross Profit ratio
of the business is more than that of similar type of business. A
pie chart is also drawn for better analysis.

Bibliography
BOOKS:
41
Kalyani : 2018:Accountancy: 156-177

T.S. Grewal: 2018: Double entry Book keeeping: 7.1-7.92

Goel: 2018:New ISC Accountancy: 9.1-9.47

Websites:
✓ www.google.com

✓ www.byjus.com

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