amount standing to the favour of such persons and/or entities on the closing date, is shown in the Balance Sheet as sundry creditors on the liabilities side. Test Your Understanding - V Mr. Sunrise started a business for buying and selling of stationery with Rs. , , as an initial investment.
Of which he paid Rs. , , for furniture, Rs. , , for buying stationery items. He employed a sales person and clerk.
At the end of the month he paid Rs. , as their salaries. Out of the stationery bought he sold some stationery for Rs. , , for cash and some other stationery for Rs.
, , on credit basis to Mr.Ravi. Subsequently, he bought stationery items of Rs. , , from Mr. Peace.
In the first week of next month there was a fire accident and he lost Rs. , worth of stationery. A part of the machinery, which cost Rs. , , was sold for Rs.
, . From the above, answer the following : . What is the amount of capital with which Mr. Sunrise started business.
What are the fixed assets he bought? . What is the value of the goods purchased? .
Who is the creditor and state the amount payable to him? . What are the expenses? .
What is the gain he earned? . What is the loss he incurred? .
Who is the debtor? What is the amount receivable from him? . What is the total amount of expenses and losses incurred?
. Determine if the following are assets, liabilities, revenues, expenses or none of the these: sales, debtors, creditors, salary to manager, discount to debtors, drawings by the owner. Summary with Reference to Learning Objectives . Meaning of Accounting : Accounting is a process of identifying, measuring, recording the business transactions and communicating thereof the required information to the interested users.
Accounting as a source of information : Accounting as a source of information system is the process of identifying, measuring, recording and communicating the economic events of an organisation to interested users of the information. . Users of accounting information : Accounting plays a significant role in society by