- Stock Valuations :
12.1. The unsold goods should be valued on the basis of cost price or market price
whichever is lower keeping the board policy in mind.
- Accounting
Ë Closing Stock
? Debit the stock account and credit the Trading Account
? Debit balance appear as asset in the Balance Sheet
Ë Bad Debts
? Debit bad debts Account and
? Credit the accounts of Debtors
? Bad debts Account will appear on the debit side of profit and loss
account
Ë Doubtful Debts
? Debit Profit and Loss Account and
? Credit reserve for Doubtful debts Accounts
? Deduct out of Sundry Debtors and show it in the Balance Sheet
Ë Depreciation
? Debit the depreciation account and
? Credit the concerned Asset Account
? debit Profit and Loss Account by depreciation Account
? In balance sheet show it as asset minus depreciation
- Profit and Loss Account
14.1. As already explained the gross profit shown in Trading Account should bring
on the credit side of Profit and Loss Account. All types of income received
will appear on credit side of Profit and Loss Account. All expenses to
carryout business like rent, salary, insurance, printing, advertisement etc.,
will appear on the debit side of the Profit and Loss Account. In other words,
on the debit side of the account, the items of expenses coming under the
following categories will be recorded.
? Selling and Distribution expenses
? Management Expenses
