Financial Statements - 2 — Account STD 11 Commerce — Question

What is Gross Profit?

Name two types of Petty Cash Book.

Annual sales of a business were as under:

	₹
Cash Sales	35,000
Credit Sales	40,000

Cost of Goods Sold (including all direct expenses) works out at ₹ 52,000. Expenses incurred on sales amounted to ₹ 6,700. Find out his Net Profit.

How can credit sales be determined from incomplete records?

Why is Closing Stock valued at lower of cost or net realisable value (market value)?

Promissory Note requires the acceptance. Comment.

What are prepaid expenses?

Calculate the amount of gross profit and operating profit on the basis of the following balances extracted from the books of M/s Rajiv & Sons for the year ended March 31, 2017.

	₹
Opening stock	50,000
Net sales	11,00,000
Net purchases	6,00,000
Direct expenses	60,000
Administration expenses	45,000
Selling and distribution expenses	65,000
Loss due to fire	20,000
Closing stock	70,000

On which side of the Balance Sheet are Prepaid Expenses shown?

State two errors committed in Cash Book which are considered while preparing Bank Reconciliation Statement.