By S. Hall, N. Skene Smith
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Additional info for Accounting Principles and Practice. The Commonwealth and International Library: Commerce, Economics and...
Capital = Capital at beginning of trading period + Net profit — Drawings. The principle, however, is unchanged. 2. Carriage. The treatment depends upon the nature of the expense. e. on goods purchased) is part of the cost of the goods we sell. e. on goods sold) is part of the cost of seUing the goods. The Cost of Goods sold, including carriage inwards, is charged in the Trading Account. SelUng Expenses are debited to the Profit & Loss Account. FINAL ACCOUNTS 33 3. Legal Expenses. These may be incurred in connection with the purchase of an asset.
B . L . Stanley 16. 10. 5. Show the entries that these facts will require in the Company's Nominal Ledger in the year ended September 30th, 1962. ).
Rose £ Assets: Motor Van 600 £2,836 £2,836 FINAL ACCOUNTS 29 It is helpful to ask, Why does this (or any other) Balance Sheet balance? The answer has already been given in the two equations given earlier. The Balance Sheet is a particular form of the equation: Capital = Assets — Liabilities. The rearrangement is simply. Capital + Liabilities = Assets. But the figure for Capital is not derived from this equation. It comes from the account which gives: Capital = Beginning Capital + Net Profit. The Balance Sheet only balances because the Double Entry System incorporates both principles.
Accounting Principles and Practice. The Commonwealth and International Library: Commerce, Economics and... by S. Hall, N. Skene Smith