P2 C10 Accounts from Incomplete Records — Account STD 11 Commerce — Question

As per this method, to find out profit and loss in any trading business unit, opening andclosing capital are compared at the year end. If opening and closing capital are not givethen it is necessary to prepare statement of affairs. To find opening capital : Opening statement of affair is prepared. To find closing capital : Closing statement of affair is prepared. Closing capital - Opening capital = Profit Opening capital - Closing capital = loss Statement of affair is also prepared as balance sheet. On left side, liabilities is kept. And on right side, Assets is kept. After deducting all debts from the total of asset side,the difference arised is known as capital.

Specimen of Statement of Affairs
Statement of Affairs of Shri …………. As on ………..
Liabilities	Amt.Rs.	Assets	Amt.Rs.
Liabilities other than capital :		Land and Building	ü
Bank loan	ü	Machinery	ü
Mortagaged loan	ü	Furniture	ü
Creditors	ü	Debtors	ü
Bills payable	ü	Bills receivable	ü
Bank overdraft	ü	Cash balance	ü
Outstanding expenses	ü	Book balance	ü
Income received in advance		Prepaid expenses	ü
Capital : Difference amount of		Income dues	ü
total amount of asset side less
amount of total liabilities other
than capital	ü
Total Rs.	üüü	Total Rs.	üüü