NTS TEST PREPARATION PUNJAB FOOD AUTHORITY JOBS, NTS TEST PREPARATION FOR PUNJAB FOOD AUTHORITY JOBS 2019PUNJAB FOOD AUTHORITY JOBS NTS TEST PREPARATION
PUNJAB FOOD AUTHORITY JOBS NTS TEST PREPARATION FOR THE POST OF ASSISTANT DIRECTOR (RESOURCE / LICENSING), ACCOUNTANT AND ASSISTANT BUDGET OFFICER
Accounting Basic Terms
Royalty is an
amount paid to a person for exploiting rights possessed by him. It is usually
paid to a patentee, author or landlord for the right to use his patent,
copyright or land. If they are productive expenses, they are debited to
manufacturing account. But in the absence of a manufacturing account. It is
debited to trading account.
Profit and
loss account is the account whereby a trader determines the net result of his
business transactions. It is the account which reveals the Net Profit or Net
Loss of the Business.
The total of
all charges to customers for goods sold both for cash and on credit is reported
tin this section. Sales returns and allowances and sales discounts are deducted
from the gross amount to yield net sales.
This refers to
the cost price of goods which have been sold during a given period. In order to
calculate the cost of goods sold we should deduct from the total cost of goods
purchased the cost of goods at the end of the year.
The excess of
the net income from sales over the cost of goods sold is also called gross
profit on sales.
It is usually
classifying operating expenses as either selling or general. Expenses that are
incurred directly and entirely in connection with the sale of goods are known
as selling expenses. Expenses incurred in the general administration of the
business are known as administrative expenses or general expense. Such as
office salaries, depreciation equipment etc.
The excess of
gross profit on sales over total operating expenses is called net profit or net
profit from operations.
Minor sources
of income are classified as other income or non-operating income. In a
merchandising business this category often includes income from interest, rent,
dividends and gains from the sale of fixed assets.
Expense that cannot be associated definitely
with the operations are identified as other expenses or non-operating expense.
A Balance
Sheet is a statement drawn up at the end of each trading period stating therein
all the assets and liabilities of a business arranged in the customary order to
exhibit the true and correct state of affairs of the concern as on a given
date. A balance sheet is prepared from a trail balance after the balances of
Nominal account are transferred either to the trading account or to the profit
and loss account.
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Classification
of Assets
Fixed Assets?
These are
assets which are acquired not for sale but for permanent use in the business.
These assets help the business to be carried on e.g. Plant & Machinery,
Land and Building.
These assets are those assets which are held
for sales or to be converted into cash after some time e.g. sundary debtors,
bill receivable, stock of goods, etc.
Liquid assets
are those assets which are with us in cash or easily converted into cash e.g.
cash in hand, cash at bank, investment etc.
The assets
that depreciate through “wear and tear” whose values expire with lapse of time
or that become exhausted through working are known as wasting Assets. This is a
sub-class of fixed assets e.g. Plant, Machinery, Mines etc.
There are
assets which have no physical existence, which can neither be seen with eyes
nor touched with hands. They do not represent anything valuable. They include
debit balance of profit and loss Account insurance prepaid Goodwill etc.
A Contingent
asset is one which comes into existence upon the happening of a certain event.
If that event happens the asset becomes available, otherwise not e.g. uncalled
capital of a limited company.
Expenses paid
in advance e.g. prepaid expenses, income earned but not received are known as outstanding
assets.
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