Financial Statements - II

and loss account of Ankit for the year ended March , and his balance sheet as on that date shall appear as follows : Trading and Profit and Loss Account of Ankit for the year ended March , Cr. Expenses/Losses Revenues/Gains , , , , Gross profit c/d , , , , , Salaries , Gross profit b/d , Rent of building , Commission received , Net profit (transferred to , Ankit’s capital account) , , Sometimes the opening and closing stock are adjusted through purchases account. In that case, the entry recorded is as follows : This entry reduces the amount in the purchases account and is also known as adjusted purchases which is shown on the debit side of the trading and profit and loss account. In this context, it may be noted, that the closing stock will not be shown on the credit side of the trading and profit and loss as it has been already been adjusted through the purchases account. Not only, in such a situation, even the opening stock will not be separately reflected in the trading and profit and loss account, as it is also adjusted in purchases by Another important point to be noted in this context is that when the