Page 4 - Chapter-11.pmd

440 Accountancy

Statement of Affairs as at ––

Liabilities Amount Assets Amount
Rs. Rs.
Bills payable ´´´´ Land and Building ´´´´
Creditors ´´´´ Machinery ´´´´
Outstanding expenses ´´´´ Furniture ´´´´
Capital (balancing figure)* ´´´´ Stock ´´´´
Debtors ´´´´
Cash and Bank ´´´´
Prepaid expenses ´´´´
Capital (balancing figure)* ´´´´
xxx x xxxx

Note: * where the total of liabilities side is more than total of assets side, capital would be
shown in assets side and it represents debit balance of capital.
Fig. 11.1 : Format of statement of affairs
Once the amount of capital, both at the beginning and at the end is
computed with the help of statement of affairs, a statement of profit and loss
is prepared to ascertain the exact amount of profit or loss made during the
year. The difference between the opening and closing capital represents its
increase or decrease which is to be adjusted for withdrawals made by the
owner or any fresh capital introduced by him during the accounting period in
order to arrive at the amount of profit or loss made during the period.
The statement of profit and loss is prepared as shown in figure 11.2.

Statement of Profit or Loss for the year ended ........

Particulars Amount
Rs.
Capital as at the end of year (computed from statement of affairs .....
as at the end of year)
Add Drawings during the year .....
Less Additional capital introduced during the year ( ..... )
Adjusted capital at the end of year .....

Less Capital as at the beginning of year (computed from statement of ( ..... )
affairs as at the beginning of year)
Profit or Loss made during the year .....

Fig. 11.2 : Format of statement of profit or loss

2015-16