Page 115 - Office Practice and Accounting 10

Exercise
1. How is the net profit or net loss adjusted in the balance sheet?
2. Why is profit and loss account prepared?
3. How is gross profit determined?
4. Why is final accounts prepared?
5. What is fixed asset? Give one example of fixed asset.
6. What do you mean by prepaid expenses?
7. In which business account indirect expenses are included?
8. What type of assets are goodwill and patent?
9. Name any two items which come under direct expenses.
10. What is meant by outstanding expense?

Practical Problems
1. From the following particulars, prepare profit and loss account of
Binesh Store for the year end 30th Chaitra 2071.
Salaries 50,000
Sales expenses 10,000
Office expenses 12,000
House rent 30,000
Gross profit 1,25,000
Legal charge 5,000
Interest received 22,000
Dividend received 6,000
Export duty 8,000
Ans: Net Profit Rs. 38,000
2. You are required to prepare profit and loss account from the following
balances of a business house for the year 2070.

Particulars Amount Particulars Amount
Interest on loan 5,000 Office expenses 2,000
Commission 500 Advertisement 20,000
Bad debts 5,000 Rent and rates 5,000
Gross profit 1,85,000 Carriage out 1,000
Loss in accident 2,000 Printing and stationery 500
Other income received 2,500 Telephone 2,000
Gain on sale of fixed assets 2,000 Legal fee 1,500
Depreciation on furniture 5,000

Ans: Net Profit Rs. 1,40,500

Office Practice and Accounting 10 109