Financial Statements of Sole Proprietorship — Account STD 11 Commerce — Question

Give the adjustment entry and accounting treatment of the following items while preparing financial statements:

1. Outstanding Salaries.
2. Accrued Interest.

Give the adjustment entry and the treatment in Final Accounts of the following:

1. Accrued Income.
2. Unearned Income.

What do you understand by Fixed Assets?

If both Adjusted Purchases and Closing Stock are given in the Trial Balance, where are the two accounts shown in the Final Accounts?

What do you understand by Current Assets?

Calculate the stock at the end:

	₹
Stock in the beginning	10,000
Cash Sales	30,000
Credit Sales	20,000
Purchases	35,00
Rate of Gross Profit on Cost	1/3

Debit balance in the Profit and Loss Account is a profit. Comment.

Explain the magnetic recorder.

At the time of renewal of a bill, the Interest Account is debited in the books of the Drawee. Is this true or false?

Which Generally Accepted Accounting Principle (GAAP) is followed and which one is ignored while preparing the accounts under Single Entry System?