UNIT 4 PREPARATION AND ANALYSIS OF

FINAL ACCOUNTS
Structure

4.0 Introduction
4.1 Objectives
4.2 Need of Accounting Information
4.3 Trading Account
4.3.1 Opening/Closing Stock
4.3.2 Net Purchases
4.3.3 Direct Expenses
4.3.4 Net Sales
4.4 Profit and Loss Account
4.5 Balance Sheet
4.6 Constructing a Balance Sheet
4.7 Classification of Balance Sheet‘s Items
4.8 Adjustment Entries
4.8.1 Closing Stock
4.8.2 Depreciation
4.8.3 Bad Debts
4.8.4 Provision for Bad and Doubtful Debts
4.8.5 Outstanding Expenses (Assets)
4.8.6 Prepaid Expenses (Assets)
4.8.7 Accrued Income
4.8.8 Income Received in Advance (Liability)
4.9 Forensic Accounting
4.10 Summary
4.11 Key Words
4.12 Self-Assessment Questions/Exercises
4.13 Solutions/Answers
4.14 References and Further Readings

4.0 INTRODUCTION

As you may know that a business is started either for profit or welfare motive.
Whenever, any stakeholder wants to associate with the business firm as a supplier,
financer, manager, investor needs information to know the financial strength and
profitability for planning, controlling and organizing activities of the business. No
decision can be taken without the consideration of the past activities as the future is,
normally associated with the past. So, therefore accounting is a systematic record of
the bunnies transactions, events leading to a presentation of a complete financial
picture for a specific period,normally annually. Hence, Accounting is mainly
concerned with the preparation of three statements known as Income Statement/Profit
& Loss Account, Balance –sheet and Cash Flow Statement. Generally, accounting
involves the following steps namely:

 collecting data,
 recording,
 classifying,
 summarising,
 analysing and
 Reporting information
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Preparation and Analysis Besides the abovementioned steps, the reporting of information is directly correlated
of Final Accounts
with business activities and its subsequent operational effects besides the financial
outcomes in monetary aspects. This accounting information is sought by many
stakeholders internally and externally both. It means accounting is a business
language that communicates financial and economic information about the business to
the needy parties. To meet the objectives, every business firm used to prepare
financial statements every year, which are sometimes called formal records of
financial activities of a business. For a business firm, the relevant financial
information presented in a structured manner and in an easy-to-understand form, is
called financial statement.

The profit and loss account are sometimes known as the Income Statement, and the
balance sheet known as financial statements. A trading account is included in the
profit and loss account, and if the business manufactures any goods or articles, a
manufacturing account is also included. All of these accounts are created only when
the trial balance has been completed. These statements prove helpful for the various
stakeholders in knowing the overall profit or loss position during the period and the
financial position at the end of the period. Thus, the overall objectives of preparing the
accounts are ascertaining of profit or loss, highlighting the financial position.
Therefore, it is necessary to know about the meaning, objectives, and process of
preparation of final accounts.

4.1 OBJECTIVES

After studying this unit, you would be able to:

 Recognize the significance of accounting information.

 Identify the different users of accounting information and their information
needs.
 Realise the objectives behind creation of Trading and Profit and Loss
Account.
 Determine the variances in Trading Account and Profit and Loss Account,
Gross Profitability and Nett Profits.
 Understand the concepts of balance sheet.
 Relate and use the various principles of asset valuation.
 Understand the tole of depreciation in ascertaining firm‘s profitability.
 Apply different Adjustment entries for determining the firm‘s financial
situation.
 Prepare the ―Trading and Profit & Loss Account‖ and ―Balance-Sheet‖ from a
given information and with the adjustments.
 Understand about the need of forensic accounting.

4.2 NEED OF ACCOUNTING INFORMATION

Accounting plays a vital role in running a business because it helps you in tracking
income and expenditures, statutory compliance, and provide significant information to
investors, management, and government which can be used in making business
decisions. There are two categories of people who are interested in a business. - i.e.,
Internal and External.
(a) Internal Users are those who manage and operate the business, including top,
medium, and lower-level management.
(b) External Users - Investors, creditors, banks, customers, government agencies, and
everyone else who isn't an internal user.

2
 Understanding and
The necessary information is supplied to the external users through the following Analysis of Financial
statements - Statements

(i) Information about profit or loss of the business through the preparing of Profit &
Loss Account/ Income Statement
(ii) Information about financial position through the preparing of Balance-sheet

Information about Profit or Loss of the Business

The profit and loss account, commonly known as the Income Statement, that shows
how much money was made or lost over the year. This statement shows gross profit
from the trade account as well as net profit from the profit and loss account –
Gross Profit = Net Sales (Sales-Sales Return) - Cost of Sales

This information is very useful as it helps in deciding the following questions:

A. Whether cost of Sales is reasonable or not?
B. Whether it can be reduced or not?
C. Whether selling price can be increased or not?
The accounting information obtained from the trading account assists us in
answering the preceding queries.

In contrast, the Net Profit earned after deducting all factory, administrative,
financial, and selling and distribution expenses. As a result, the Profit & Loss
account/Income Statement provides information about net profit earned or net loss
incurred. This also aids in answering the following questions:
A. Is it reasonable to spend this much money?
B. Is it possible to save costs or not?
Net profit is used as a basis for taxation and distribution as a profit/dividend among
the owners/partners/shareholders of the business firm.

Information about Financial Position of the Business

The Balance Sheet, and the Position Statement both are same, and it provides
information about the financial health of the company. This statement provides
additional information about the business assets, such as current assets, fixed assets,
cash and bank balances. These assets are the sum of the business's liabilities, which
may be taken from the proprietor or borrowed from outsiders. This statement can help
you answer the following questions:

A. Whether the funds invested are safe and sound. It means the return on the
investment is reasonably good along with the safety of the invested amount
i.e., capital.
B. Whether return on total assets is adequate or not?
C. It helps the investors, the creditors to arrive at a correct decision regarding
investment, lending of funds etc.
D. It helps in restoring confidence among the employees about their provident
fund being properly deposited with the cost as per requirements.

As a result, you can see how accounting can play an essential part in displaying the
business-running outcomes (profit/loss) as well as its financial status (solvency or
insolvency).

4.3 TRADING ACCOUNT

Trading account is the first step in the process of preparing final accounts. It helps in
finding out the gross profit or gross loss during an accounting year. It is normally prepared
by a merchandising concern which purchases and sells the goods during a particular
period. The trading account shows the result of buying and selling goods.
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Preparation and Analysis
of Final Accounts
Gross Profit = Net Sales Revenue - Cost of Goods Sold Gross Loss = (Net Sales
Revenue - Cost of Goods Sold)

where:

Net Sales Revenue = Cash Sales + Credit Sales - Sales Returns

Cost of Goods Sold = Opening Stock + Net Purchases + Direct Expenses -Closing
Stock

Net Purchase = Cash Purchases + Credit Purchases - Purchases Returns.

We have already observed initially that our ‗Trading Account‘ is generally

prepared in ‗T‘ form, wherein the ‗carried in‘ goods stock, procurement and
inwards along with the directly made expenditure being depicted at debit side
while the sales and closing stock featured at the credit side of the trading account.

Components of Trading Account

4.3.1 Opening/Closing Stock

It is the carried stock in hand which we bring into the account for beginning a new
accounting/ financial year. This is inclusive of the wide variety or types like the raw
material, in process goods and finished goods and are shown in the debit side of the
(TB) Trial Balance report. Another issue to the accountant is the valuation of the said
stock whether it is done on cost price or the prevalent market prices. So generally, the
lower valuations are preferred. At the end of the said financial year this becomes the
closing stock while the same entry is accepted for the opening stock for the next
accounting period. The closing stock gets captured on the credit side of the Tr. a/c.

4.3.2 Net Purchases

Business requires continuous purchase and sales of various products and services.
Purchase of raw material and selling of finished goods remains key purchase areas. It
may be noted that goods or material are factored here as assets and the stock which is
not for the sale purposes is not considered here under this classification. So, for better
understanding Net purchase amount is calculated by deducting purchase returns (or
Return Outward) from the gross purchases (on cash & credit both)

4.3.3 Direct Expenses

These are the cumulative including the amounts spent towards the expenses made to
bring the goods at the production site till they are consumed to become a saleable
product. This may include the transportation expenses etc. towards this purpose. Their
various types would be covered now one by one for ease of understanding.

i. Wages paid towards labour working for production shall be debited in the
trading a/c. it may be noted that the firm should not have a separate
manufacturing account maintained.
ii. Carriage/freight inwards as said earlier, expenses under this head or
similar nature (whether paid or outstanding), spent on transportation of
raw stock to the production site or warehouse are to debited to trading a/c.

4
 Understanding and
iii. Octroi: a form of municipal tax paid when the goods enter from a Analysis of Financial
municipal check-post. This amount paid is captured as a direct expense in Statements
the trading a/c.
iv. Custom duty: applicable when the goods arrive from another country and
this amount is paid towards importing them and the usage of such stock is
to be used for selling, gets debited to trading a/c. However, it may also be
noted that if this duty gets paid at the time of exporting, it gets captured in
the selling expense head and duly depicted in the P & L a/c.
v. Factory rent, insurance, lighting & power, and heating: these all
expenses spent in the direction of converting the raw material to finished
product are to be debited to trading a/c.

4.3.4 Net Sales

Irrespective of the nature of sales transaction, whether it is on cash or credit, the sales
returns require to be deducted from the gross sales to arrive at the Net sales figure. It
is also to be understood here that this sales head pertains to the sales transactions of
the finished goods and not arising out of sale of any asset of the company. Also, the
goods sold but not sent to the customer/ supply chain partner or received at the
customer/ supply chain partner premise are to be recorded in the closing stock and not
in the sales head. However, with the change of ownership, the necessary entries be
passed, accordingly.
Format (Proforma) of the Trading Account:

Trading Account
(For the year Ended...................................................................... )
Dr. Cr.
Particulars Amount Particulars Amount
To Opening Stock By Net Sales
Raw Material ---------- Sales --------------
Work In Progress ---------- Sales Returns-------------
Finished Goods -----------
By Closing Stock
To Purchase Raw Material
Purchase ----------- Work In Progress----------
Purchase Return ---------- Finished Goods -----------

To Direct Expenses
To Gross Profit
(Transfer to profit and loss
A/C)

Example 1
Of the accounting data of Shiva Agencies, create a Trading a/c for the FY ending 31-
03-2021
Particulars Amount (Rs.)
Opening stock 1,30,000
Purchases 9,00,000
Sales 14,40,000

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Preparation and Analysis Returns Inwards 10,000
of Final Accounts
Returns Outwards 30,000
Carriage Inwards 24,000
Wages 96,000
Fuel & Power 64,000
Closing stock 1,60,000

Answer 1
Trading a/c of Shiva Agencies
for the FY ending 31-03-2021

Dr. Cr.
Particular Amount Particular Amount
Rs Rs
To Opening Stock 1,30,000 By Sales
To Purchases 14,40,000
9,00,000 8,90,000
Less : Returns 24,000 Less : Returns 30,000 14,10,000
10,000 96,000
To Carriage 64,000 By closing Stock 1,60,000
To Wages
To Fuel & Power
To Gross Profit 3,66,000
transferred to P & L A/c

15,70,000 15.70.000

☞ Check your Progress – 1

(i) Create a Trading a/c from the given accounting data:

Opening Stock 40,000 Power 6,000
Purchases 1,80,000 Octroi 11,000
Carriage Inward 4,000 Freight 8,000
Wages 42,000 Sales 3,20,000
Return Outwards 7,000 Sales Return 10,000

Closing Stock Rs. 60,000.

(ii) How are Purchases different from Net Purchases?

(iii) How are Net Sales different from Sales?
(iv) List any five items which are in the nature of direct expenses.
(v) From the following information, calculate the gross profit —
ales - Rs 25,00,000; Purchases Rs 12,00,000, Closing Stock - Rs 3,00,000,
Wages -2,50,000 and Opening Stock - 5,50,000

4.4 PROFIT AND LOSS ACCOUNT (P & L A/C)

Profit & Loss account /Income Statement presents the operational results of a business
firm for a particular period. This account shows the summary of changes in the
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 Understanding and
owner‘s capital/equity/claim resulting from the operations of a firm in the given Analysis of Financial
period of time. In this account revenues of a particular period are matched with the Statements
expenses of the same period. The excess of revenues over the expenditures is termed
as a ‗net profit‘ and excess of expenditures over the revenues is termed as ‗net loss‘.

Recording entries in a Profit and Loss Account:

The profit & Loss account is prepared in two sections – Trading account and Profit &
Loss account. The trading account shows the gross profit or loss made by a firm on
selling and purchasing of goods. This account does not include the other operating
expenses incurred by a firm during the course of operating of a firm. These items
related to the operating expenses are appeared in the second section of the account i.e.
‗profit & loss account‘. Likewise, a firm may have other incomes from different
sources e.g income received from rent, interest, dividend, commission etc are also
shown in the credit side of the profit & loss account. The net result of such incomes
and expenses is the net profit or net loss and this result of profit & loss account is
transferred to capital account of the owner in the balance-sheet. The format of
preparing the Profit & Loss account is given in the next paragraph -

Enlisted entities be debited in the P&L a/c:

1. Administrative Expense (Office Salaries & premise rentals, electricity,
Printing, stationery, postage, Insurance and communication expenses,
Director‘s Fees, etc.
2. Sales and Distribution Expenses including Salesmen‘s salary, Commission,
travelling expenses, Advertising, Packing expenses, Royalty, etc.
3. Financial Expenses (Interest on loan/Capital, Cash Discount, Bad Debts, Bank
Charges, etc.)
4. Asset Depreciation.
5. Other Expenses/ Losses incurred towards Loss on Sales of Fixed Assets, Loss
by Fire, by Theft, by Accident, etc.
6. Taxes including Sales Taxes, Income Taxes etc.

The following items are credited in the Profit and Loss Account (reported gains
and receipts) such as:
Dividend, Cash Discount, Interest, Rent, Selling Fixed Assets, Apprentice
Premium etc.

It may be noted that any expense of household and personal nature paid by the
company to the owner(s) don‘t factor in the P & L a/c statement. It may be recorded
as drawing s of personal nature by the owner(s) and be subtracted from the Capital
Head of the Balance Sheet statement for the corresponding financial year.
The Following is the Proforma of Trading and Profit & Loss Account:
Profit and Loss Account for the year ended…
Particulars Amount Particular Amount
To Gross loss b\d By Gross profit b/d
(In case of gross loss) (In case of gross loss)
To office rent, rates, and taxes By Discount received
To salaries By Commission receive
To Telephone charges By Bank interest
To Insurance By Rent received
To Audit fees By Bad debts recovered
To Legal charges By Profit on sale of
To Electricity charges machinery
To Maintenance expenses By Profit on sale of
To Repairs and renewals investments
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Preparation and Analysis To Depreciation
of Final Accounts To Salaries
To Advertisement
To Carriage outward
To Bad debts
To Provision for bad debts By Net Loss
To Loss on sale of machinery (Transferred to Capital A/c)
To Loss on sale of investments
To Loss by fire
To Net Profit
(Transfer to capital a/c)

Note: 1. Either gross profit or gross loss as opening balance will be reflected.
2. Similarly, the ending balance will also reflect either net profit or net loss.
Example 2
M/s Forever Ltd. reports below-mentioned data Tin their financial statements.
Based on it, make a Trading a/c and P & L a/c the FY 31 March 2022.

Debit (I R) Credit (II R)

Drawings 35,000
Building 60,000
Debtors and Creditors 50,000 80,000
Returns 3,500 2,900
Purchases and Sales 3,00,000 4,65,000
Discount 7,100 5,100
Life Insurance 3,000
Cash 30,000
Stock (Opening) 12,000
Bad Debts 5,000
Reserves for Bad Debts - 17,000
Carriage Inwards 6,200
Wages 27,700
Machinery 8,00,000
Furniture 60,000
Salaries 35,000
Bank Commission 2,000
Bills Receivable/Payable 60,000 40,000
Trade Expenses/Capital 13,500 9,00,000
Additional Information: Stock on 31st March 2022 was valued at INR 50,000/-

Answer
Trading and P& L Account of M/s Forever Ltd.
for the Year Ending on 31st March 2022

Dr. Cr.
Particulars Rs. Particulars Rs.
To Opening Stock 12,000 By Sales 4,65,000
To Purchases 3,00,000 Less: Return 3,500
Less: Return 2.900
4,61,500
2,97,100
To Wages 27,700

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 To Carriage Inward 6,200 By Closing Stock Understanding and
To Gross Profit 1,68,500 50,000 Analysis of Financial
Statements
5,11,500
5,11,500
7,100
To Discount 3,000 By Gross Profit 1,68,500
Paid To Life 35,000 By Discount Received 5,100
Insurance To 2,000 By Reserve for Bad 17,000
Salaries 13,500 Debts
To Bank Commission 5,000
To Trade Expenses 1,25,000
To Bad Debts
To Net Profit
1,90,600 1,90,600

Note: Balance Sheet of this Example is presented later under heading "Balance
Sheet"
☞ Check Your Progress – 2

Trading. A/c. P&L a/c.

Aimed at determining gross profit (GP) or It is made to disclose net profit/loss.

loss for a business entity.

It pertains to the indirect expenses like ones

It pertains to the sales and cost of goods of administrative & financial nature. They
sold, including direct expenses. are adjusted with gross profit and other
arising revenues.

Its result in gross profit/loss being It results in the net profit/loss being
transferred to the P & L a/c. transferred to the capital account.
1. Elaborate your understanding by differentiating between the following:
i. Gross Profit and Net Profit

ii. Trading Account and P & L a/c.

2. List any FIVE items each either debited or credited in the P & L a/c statement.

3. Make a Trading and P & L a/c for the year ended 2022 based on information
provided below:

Particulars Dr. (Rs.) Cr. (Rs.)

Capital 1,00,000
Building 15,000
Drawing 18,000
Furniture 7,500
Motor Car 25,000
Interest Paid for Loan 900
Loan from XYZ'et 12% 15,000
Purchases and Sales 75,000 1,00,000
Opening Stock 25,000
Establishment Ex. 15,000
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Preparation and Analysis Wages 2,000
of Final Accounts
Insurance 1,000
Commission 7,500
Debtors and Creditors 28,100 10,000
Bank Balance 20,000
Additional Information: Closing Stock is Rs. 32,000.

4.5 BALANCE SHEET

After preparing the ‗Profit & Loss account which provides the information related to
the operational performance in terms of net profit or net loss of the firm for a
particular period, now a firm wants to know the financial position of the firm as on a
particular date so therefore, every business firm also prepare another financial
statement known as a ‗Balance-sheet‘ presents the details of all assets and liabilities.
Therefore, a balance-sheet is a list of balances in the assets and liabilities accounts.
This list shown the position of assets owned and liabilities owed by a firm at a
particular point of time.

As the Balance sheet is for the specific period, any next transaction by the firm
changes the statement and thus requiring another one being generated. This can be
understood with the following exhibit:
Mr. PV Pillai intends to buy a car costing INR 8,00,000. Since he didn‘t have that
much money, he required to borrow some from a bank. The bank offered to finance
him with a loan of INR 5,00,000/- if Mr. Pillai brings in three lakh rupees.
On broadly accepting the offer, Mr. Pillai goes to the bank to taking their loan
proposal forward. The bank manager required to verify my loan repaying capability
for which he sought replies from Mr. Pillai on his two queries?
i. The cumulative value of assets he owns.
ii. The cumulative value of assets he owes and to whom?
This can be understood that the bank would like to ascertain ‗Mr. Pillai‘s worth.
He gave the below mentioned replies:

Claims Against Things of Value Things of Value Owned by Mr. Pillai

INR INR
Personal loan from friend 2,00,000 Balance with bank 3,50,000
Fixed deposits 2,50,000
Other personal 4,00,000
Belongings
2,00,000 10,00,000

Claims Against Things of Value Things of Value Owned by Mr. Pillai

INR INR
Personal loan from friend 2,00,000 Balance with bank 3,50,000
Fixed deposits 2,50,000
Other personal 4,00,000
Belongings
2,00,000 10,00,000

The above information of Mr. Pillai would indicate that he owns INR 10,00,000 worth
things of value of which INR 3,50,000 are available in liquid form with the bank.
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 Understanding and
Another INR 2.5 lakh investment is in a locked form (FD). Rest of four lakh is in the Analysis of Financial
form of immovable asset (house/ building/ property etc.). Besides these assets, Mr. Statements
Pillai requires repaying one lakh to his friend. This means he already carries a liability
of one lakh rupees on his things of value amounting to INR 10 lakhs.
For ease of understanding it may be narrated that Mr. Pillai‘s worth of INR ten lakh
Rs. 10,00,000, one lakh comes as a claim on his worth, so Mr. Pillai‘s Net Worth
arrives to be INR nine Lakhs.

Now, we may tabulate his situation as follows:

Financial Position I
Amount owned by Mr. Pillai Things of Value Owned by Mr. Pillai
Rs. Rs.
Personal loan from friend 1,00,000 Balance with bank 3,50,000
Own claim or net worth 9,00,000 Fixed deposits 2,50,000
Other personal 4,00,000
Belongings
10,00,000 10,00,000

Under the above scenario, bank would be comfortable for loan grant of INR five lakh.
To enable Mr. Pillai to own the car, it will cost INR 8,00,000. At the time Mr. Pillai
drives the car to his house, his situation can be captured as:

Financial Position II
Claims Against Things of Value Things of Value Owned by Mr. Pillai
Rs. Rs.
Personal loan from friend 1,00,000 Balance with bank 50,000
Mortgage loan from bank 5,00,000 Fixed deposits 2,50,000
Own claim or net worth 9,00,000 Car 4,00,000
Other personal 8,00,000
Belongings
15,00,000 15,00,000

It is very much visible that Mr. Pillai‘s worth has substantially been increased post
purchasing the car i.e., from earlier 10 Lakh to at present, 15 lakhs. It may also be
observed that there is an equal and substantial surge in claims or outstanding on his
reported worth i.e., mortgage loan from the bank, though his net worth remains as it
is.

4.6 CONSTRUCTING A BALANCE SHEET

With having a sound understanding about the need for and importance of annual
financial statements, we would focus on various aspects of the Balance sheet. We
know that the financial transactions require to be captured in the annual statements
and that the stakeholders are interested in having updated information about the
performance and the financial position of the firm. It is not possible to make a new
balance sheet every time transaction after transaction, as this statement is typically
made on culmination of a particular period which generally is a financial year (F.Y)
for the company. This F.Y is also known as an accounting period or fiscal year also.

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Preparation and Analysis Many firms use the period for making a balance sheet as one calendar year as an
of Final Accounts
ongoing practice but there is no logical reason behind this.
The making of a Balance sheet‘ is a structured and systematic representation or
reporting of financial data of the assets and liabilities in a company. This statement,
made at the end of a year, as discussed previously, showcases the annual position of a
firm‘s assets and subsequent claims on those assets, thereby making our balance sheet
as an important annual financial statement depicting annual numbers of the firm‘s
assets, liabilities, and capital accounts.
We Indians, prefer the English convention, as per the below format for liquidity, i.e.,
ease of encashing on the assets. Based on this ease of liquidity the faster liquid-able
assets are put initially and the others are put on the same continued basis, in the said
annual Proforma. On the same lines, Liabilities are depicted with the current liabilities
standing first in line to be followed by the fixed or long-term Liabilities while, the
owner(s) capital is placed at last.

Liabilities NTR Assets INR

Current Liabilities Fixed Assets
Creditors Bills Furniture and Fixtures
Payable Plant Machinery
Bank Overdraft Land
Outstanding Expenses Goodwill
Income Received in Advance Current Assets
Cash in Hand
Cash at Bank
Fixed Liabilities Stock-in-Trade
Loan Mortgage Debtors
Capital Bills Receivable
Prepaid Expenses

Firm‘s assets may also be presented in the balance sheet on the basis of permanence,
with more stable, enduring or long lasting assets ranked first while the short lived
ones follow as per their lives.

Balance Sheet of M/s...

As on DD/ MM/ YYYY
Liabilities INR Assets INR
Capital Goodwill
Mortgage Patents and Trade Marks
Bank Overdraft Furniture and Fittings
Outstanding Expenses Plant and Machinery
Income Received in Unexpired Expenses
Advance
Creditors Stock-in-Trade
Bills Payable Sundry Debtors
Loan Investments
Bills Receivable
Cash in Bank
Cash in Hand

Let‘s see the practical implications of our learnings to business. The entity principle
says to consider ‗business‘ distinct from owner(s) and the same is given in the
following example of a Balance sheet extracted from a P & L a/c.

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 Understanding and
Analysis of Financial
Statements

Balance Sheet of Flora Plastics Ltd. as on 31st March 2022

Liabilities INR Assets INR

Capital 9,00,000 Building 60,000
+ Net profit 1,25,000 Machinery 8,00,000
- Drawings 35,000 9,90,000 Furniture 60,000
Bills Payable 40,000 Debtors 50,000
Creditors 80,000 Stock 50,000
Cash 30,000
Bills Receivable 60,000

11,10,000 11,10,000

Accounting Concepts to Evaluate a Balance Sheet

Of the various accounting rules, concepts and postulates studied would serve to be an
enabler in making a Balance Sheet. The Dual Aspect Principle stands much
important in this direction as it treats each accounting transaction having dual effects
so placed both at the debit & credit columns. This makes it stand equated to the
concept of Equality of Assets to Liabilities and Owner’s Equity.
It is important to note that all such captured transactions stand recorded in the book of
accounts as Monetary Units regardless of the time & quality parameters. In the above
illustrative example, cash, merchandise inventory and shop premises contribute to the
Monetary Quantities.
All the recorded transactions in the balance sheet present the financial position of the
firm and not for the firm‘s owner. The formation of balance sheet also follows the
Going concern principle. Thus, cumulative asset value is written off over a period by
depreciation method. The asset valuation is on the Historical Cost basis.

☞ Check Your Progress – 3

Fill in the blanks:

i) The balance sheet is created for the following annual accounting period:
Ans: ____________________________________________________________
ii) The balance sheet, which is prepared at the end of a financial year, shows the
following balances:
Ans: ___________________________________________________________
iii) The assets on a balance sheet are grouped together as:
Ans. ___________________________________________________________

iv) On the balance sheet, claims against assets are listed as:
a) ___________________ liabilities b) ________________ liabilities
c) ___________________equity.

4.7 CLASSIFICATION OF BALANCE SHEET’S

ITEMS
13
Preparation and Analysis
of Final Accounts
We understand now that the structure of the balance sheet has three distinct features
been recorded individually i.e., assets, liabilities, and capital. Also, assets & liabilities
get depicted in sub-groups to be recorded in the order of their liquidity/Permanence.
Liabilities and capital are listed above the assets.
Current Assets
Happens to be the belongings, convertible to cash in a year or within the operating
cycle. The operating cycle is time-duration required for transforming raw-material to a
finished product and adding the further selling time plus time taken for recovering
money from debtors/ retail or supply chain partners.
Cash
It comprises of the Government controlled currency (legal tender), bank cheques for
trading purposes. It is a current asset when required by a firm for its daily business
operations. Firms keep it in their reserves and further provision with banks to get
money ‗on call‘ from their current accounts.
Account Receivables
These are the sums owed to the firm by Debtors, so also called as ―unpaid customer
accounts‖ and ―trade receivables‖. When the debtor(s) fails to repay the amount,
those amounts get classified as non-collectable amounts or payment defaults or Bad
Debts. Though one can‘t predict which and how much the amounts will turn ‗Bad‘
still based on past trends, the accountant estimates and provisions for them.
Inventory
The term has large scale ramifications as it carries differential understanding with
different business operations. Say for a trading entity, it is the quantitative value of the
merchandise carried for customer selling as a routine practice. While productions
companies take inventory as stock/ raw material for producing goods. The under-
production goods, stocks in stores and finished good stock etc. all get captured under
this head.
Pre-paid Expenses
It comprises of some expenses typically paid as ‗advance‘ like rent, advance tax,
subscriptions, insurance etc. They are categorised under the head of ‗current assets‘
since they are paid in advance (pre-payments).
Fixed Assets
are tangible assets of the business which have comparatively longer life. They
continue to hold importance for a firm not only once but year on year till they last or
are not sold off. Current assets are easily liquefiable to cash. They amount to ‗value
addition‘ by aiding to the production and trade processes. These fixed assets have a
period for which they are economically used.
It‘s widely seen examples are land, building, plant, machinery and motor vehicles.
Except land, all others get depreciated over the time periods, so land is recorded
separately

Intangible and Other Fictitious Assets

are the ones which carry value but have no physical attributes. They are intangible and
example being Goodwill. “Goodwill is defined as ability of a firm to earn profits in
excess of normal return‖. It has been witnessed that valuation of intangible assets
depletes with time and this expiration cost is called Amortization, like depreciation.

Current Liabilities
Liabilities are Outsiders' claims against the company are referred to as liabilities.
They are the sums owing by the company to people who have lent money or offered
goods or services on credit to the company. These liabilities are categorised as current
liabilities if they are due within an accounting period or the business's operating cycle.

Accounts Payable
Also known as ‗sundry creditors‘ comprise of unsecured debts owed by business.
They may not have formal endorsement or promise to pay.

14
 Understanding and
Analysis of Financial
Accrued Liabilities Statements
are the expenses/obligations of last year being paid in next year for e.g., Wages and
rent.

Provisions or Anticipated Liabilities

Comprise of known liabilities but undefined amount, like income tax payable.
Accountants use the trending method to forecast such liabilities.

Contingent Liabilities
Before going ahead in this, you should first understand the distinguishing feature of
contingent liabilities from estimated liabilities. The latter have uncertain amounts
while the former doesn‘t happen to be liabilities, presently. But become one after a
defined event.

Long Term Liabilities

are generally of more than a year and encompass typically all outsider‘s liabilities not
included in the Current Liabilities and Provisions. For example, debentures, bonds,
and bank borrowings.

Capital
We already are aware that Assets = Liabilities + Owners’ Equity.

Reserves and Surplus or Retained Earnings

Every business effort for shareholder‘s profitability distributed as dividends. Such
profits may be chosen to be retained to business by the management.

☞ Check Your Progress- 4

Fill in the blanks:

A. Generally, items on the balance sheet are listed in the order of their respective
importance. Write the order.
B. Balance sheet might be provided in________ or __________ format.
C. The principle of __________ is used to value inventories in the balance sheet.
D. Accounts receivables are also referred to as______________________
E. Expired cost with respect to a fixed asset is referred to as_________
expense.
F. Expiration of cost of intangible assets is referred to as _______________
G. Bill Payable are referred to as _____________
H. We judge an item as a current asset if it is converted into cash during an
________
I. Liquidity refers to nearness of an item to ____________
J. Items classified as current assets are usually listed in the order of their relative
_______
K. The basis of valuation as applied to temporary investment is
L. Asset losses expected out of non-collection of receivables are called
_____________
M. Formal written/documented debts refer to_____________
N. Items commonly referred to as inventory include (a)______ (b)_____and
(c)_______
O. Fixed Assets are valued on the basis of _____________
P. Balance Sheet is a statement of ____________
Q. ___________ represents the Owner‘s Claim against the Assets of a business.
15
Preparation and Analysis R. ___________ represents Claims of Outsiders against the business.
of Final Accounts
S. ___________ increase Owner‘s Equity.
T. Amounts owed by a business on account of purchase of inventory are usually
called __________ or __________.
U. Amounts receivable by a firm against credit sales are usually called
___________
V. As a general rule all assets are valued at their _____________ to the business.
W. The dual aspect principle ensures an important equality reflected by the
Balance Sheet ___________
X. All valuations specially those of fixed assets in a balance sheet are based on
an important assumption about the entity as a _______________
Y. Owner‘s Capital could be understood as comprising of two parts (a)
_________ and (b) ___________.
Z. Operating Cycle is the duration of ________________

4.8 ADJUSTMENT ENTRIES

The account subject encompasses direct correlation with the various accounting
concepts/conventions/principles. We also understand that the Final a/cs get treated on
accrual basis, so the expenses require to be regularly deducted. Such expenses get
paid when due for the period in the ongoing financial year or the provisioned other
accounting year(s). We should ‗add‘ the currently earned revenue items, but not
received yet. All the above-mentioned provisions and corrections in the final A/cs are
better known as Adjustments. These adjustments incorporated with the help of
adjusting entries confirm a judicious matching of costs and revenues towards ensuring
a correct P & L statement for a particular period.
Further now, we would try to understand the effect of the said adjustments on the
underlying final account.

4.8.1 Closing Stock

Is also understood as the value of the unsold stock of the firm. The valuation
parameter stands important here as on what basis the stock valuation happens i.e. cost
price of the firm or the market price. The lower values are accepted.

4.8.2 Depreciation

Fixed assets periodically reduce their value thus factored as depreciation. As the
accounting entry Depreciation account is debited while individual asset account is
credited.

4.8.3 Bad Debts

Amounts to loss arising from unpaid debts. From debtors or it may even be said as
irrecoverable. They are treated by transferring them to the debit side of P&L a/c.

4.8.4 Provision for Bad and Doubtful Debts

As understood from Bad debts, they require to be ‗written off‘ from the accounting
records. Thus, based on past trends or management‘s insights, a provision towards
doubtful debts is made. This is done to make the balance sheet capture and reflect the
true essence of business.

4.8.5 Outstanding Expenses (Liabilities)

16
 Understanding and
Analysis of Financial
Business involves paying for the expenses and accountants capture such payments Statements
made in their records. Failure to capture an expense is understood as an
Understatement.

4.8.6 Expenses (Assets)

Expenses may be done as advances and are known as prepaid expenses. While making
annual financial statements a part or full, payment not made or remains unconsumed
becomes asset.

4.8.7 Accrued Income (Assets)

is an amount earned but not actually received during that accounting period or by the
time of final accounts being made?

4.8.8 Income Received in Advance (Liability)

Can be defined as ―income received but not earned during the accounting period‖. It
can be said that it is the corresponding amount for which the goods or services are to
be offered in coming times.

4.9 FORENSIC ACCOUNTING

Forensic accounting is often described as a specialized field of accountancy,

which investigates fraud and analyzes financial information to be used in legal
proceedings. It is an amalgam of numerous varied disciplines. Its roots extend
not only to accounting and auditing, but also to law, criminology, psychology,
sociology, economics and finance. Accounting records, financial statements, and
other associated financial documents are investigated in forensic accounting. The
investigation's findings are mostly used for legal support and conflict resolution.
It used in tax frauds, securities fraud, business valuation and economic damages
calculations. It also covers bankruptcies, reorganisations, insolvencies, money
laundering and post acquisitions disputes.
The financial statements of the company, management accounts, and other related
documents, data, and information relating to the investigated subject matter are
usually the focus of the investigation and verification.

Definitions

Dictionary of accounting terms -

"Forensic accounting is a science (i.e., a department of systemized knowledge)
dealing with the applications of accounting facts gathered through auditing methods
and procedure to resolve legal problems."
Websters Dictionary -
Forensic accounting means, "Belonging to, used in for suitable to court, of judicature
or to public discussions, debate and ultimately disputes resolutions, it is also defined
as an accounting analysis that is suitable to the court which will form the basis for
discussion, debate and ultimately dispute resolution."
As a result, forensic accounting delivers a court-acceptable accounting analysis that
will serve as the foundation for debate, discussion, and, ultimately, conflict settlement.

Scope of Forensic Accounting

The following are the scope of the use of forensic accounting -
- Banks Frauds
17
Preparation and Analysis - Securities and Exchange Board of India (SEBI)
of Final Accounts
- Insolvency cases
- Serious Fraud Investigation Office
- Economic Offenses Wings

Difference between Forensic Accounting and Audit:

There are some parallels and contrasts between forensic accounting and auditing. A
financial audit statement, for example, is designed to allow auditors to conduct an
impartial evaluation and then provide an opinion. On the financial statements, the
auditor will only provide reasonable assurance. Forensic accounting, on the other
hand, looks into the financial statements and calculates the potential loss. They are not
going to provide an opinion.
Until recently, it was believed that the ‗conventional‘ accounting and auditing
function are sufficient for detecting fraud. It was believed that it is the duty of the
internal and external auditors that while doing their routine procedure of audit, they
would report all kinds of irregularities they detect. But we also know that the financial
auditing does not go beyond checking the books of the organization for the
conformity to GAAP (Generally Accepted Accounting Principles), auditing standards
and accounting policies. Financial auditing is limited to the unearthing of material
deviations, exceptions, oddities, errors and variances from the acceptable and
applicable standards of accounting & auditing practices. But the fraud is something
which is deep rooted in the accounting systems of organization and therefore, the
necessity for forensic accounting. The whole idea is to probe deeply into the financial
transactions & business situations, so as to rule out any possible fraudulent activity.
The general accounting is limited to maintaining of books by keeping the adequate
record of all the material financial transactions of the organization, duly supported by
the vouchers, so that the results are communicated to the stakeholders through various
reports. Forensic accounting goes beyond the books. It‘s looking beyond the numbers.
Forensic accountant is categorically required to visit the past transactions and report
about any kind of anomalies. They need to play a ‗proactive‘ risk-reduction role. The
‗explanatory‘ analysis i.e., cause & effect of phenomena of fraud is the basis of
Forensic accounting.

☞ Check Your Progress – 5

1. Indicate against each statement whether the following statement is true or false-
A. Wages should be credited to the Trading account
B. Freight outward should be debited to the trading account
C. Prepaid expenses are a part of current assets.
D. Provision for doubtful debts is a liability
E. Closing stock, when appearing in the trail balance, should be taken directly
to the balance sheet.

2. Mention any three uses of Forensic Accounting.

4.10 SUMMARY

Accounting is the medium of recording the business transactions made in the business
that is why, accounting is termed as the language of the business. All the persons
interested in the business such as investors, banks, suppliers, government, employees
and others get the necessary financial information through accounting because it is
properly analysed and summarised to the extent that can be understood by all
concerned. So, therefore, it is necessary for a business firm to prepare the financial
18
 Understanding and
statements every year. Financial Statements are also known final accounts. Final Analysis of Financial
Accounts means P & L a/c statement and balance sheet. P & L a/c statement also Statements
contains one more account which is known as ‗Trading Account‘ and if the business is
manufacturing any item or article, then one more account is also prepared that is
known as ‗Manufacturing Account‘. Profit and Loss account which is also known as
the Income Statement is an important statement for every business firm which
discloses the result of the operations of the firm for a given period which is normally
12 months. It shows the profitability and earning capacity of the firm. The balance-
sheet of a firm, on the other hand, presents the financial conditions as on a specific
date. It is like a screen picture of the financial position that reveals financial health in
terms of assets and liabilities on a particular date. However, on its own, it doesn‘t
disclose operational details of the business. Though, comparing a pair of balance
sheets gives the business professional about the comparative changes in the business
position. This makes way for another set of well appreciated statements from the
commercial world i.e., the Funds Flow Statement and Cash Flow Statement. These
two statements would be taken up in the next unit 1.2.

4.11 KEY WORDS

Asset: comprises of everything which is tangible or intangible and also carries a
monetary value for a business entity; including what it owns.
Contingent Liability: it is a form of liability which may arise for a business entity in
the coming times or future. It doesn‘t gets entered in the book of accounts by the time
it occurs. For ex. A legal matter may arise for this business entity. It may however be
provisioned for a certain amount be paid for.

Cost of Goods Sold - It is the direct cost of goods sold. It is arrived as follows
-
Opening Stock + Purchases + Carriage Inward + Wages - Closing
Stock
Current Assets: comprises of various assets of a business entity kept for the purpose
of encashing them within the operating cycle or within a year whichever is longer.
Such assets include cash, receivables, inventory and pre-payments (advances).
Current Liabilities: include claims/dues arising out of the firm‘s creation of assets,
which it has to pay for (from cash and current assets) within one year or within the
operating cycle, whichever is longer. Account payable, tax or other claims payable,
accrued expenses form the various types of current liabilities.

Fixed Asset: based on the time parameter it is for a longer life-period of more than a
year and is tangible in nature. It may encompass assets like land, building, plant,
machinery, motor vehicles, furniture and fixtures.

Forensic Accounting - Forensic Accounting is the use of accounting skills to analyse

the financial data for use in legal proceedings.

Gain - It is used for profit other than regular profit such as capital gain.
Gross Profit - It is the amount (difference) between sales - cost of sales.
Intangible Assets: They don‘t have any physical attribute(s) and are long term in
nature. It comprises of assets like goodwill, patents, franchises, formation expenses
and copyrights.

Liability: it is the amount which requires to be paid by the individual or the firm
(debtor) to the other entity called creditor. A balance sheet of that firm comprises of
19
Preparation and Analysis all cumulative claims from the creditors raised by pledging firm‘s assets. Here, the
of Final Accounts
firm‘s assets doesn‘t comprise of the owners‘ assets.
Net Profit - The amount of gross profit left after allowing for all expenses. If
expenses are more than Gross Profit then the net result would be net loss.
Owner’s Equity: pertains to the firm owner‘s investments to the business towards the
firm‘s continuity. The firm owes this owner‘s amounts and is liable to pay it back

4.12 SELF ASSESSMENT QUESTIONS/EXERCISES

1. Discuss the utility of accounting information.

2. What do you understand by trading account? How far it is different with the Profit
& Loss account?
3. What adjustments are required to close the books of account? Explain in details.
4. Discuss the various items which are shown in profit & loss account.
5. What are the Financial Statements? What purpose do they serve?
6. Discuss the various items which are shown in the Balance-Sheet.
7. Why are adjustment entries required to be made at the time of preparing Final
Accounts? Give illustrative examples of any Five such adjustment entries.
8. Differentiate between -
(a) Prepaid Expenses and Outstanding Expenses
(b) Outstanding Income and Accrued Income
(c) Interest on Capital and Interest on Drawings
9. Discuss the concept of ‗Forensic Accounting‘ and its applications in different
areas.
10. How the forensic accounting is different with the audit.

11. Anshul Enterprises is a trading firm. There was no stock of goods at the beginning
of 2021. During the year 2021, it purchased 3,00,000 units of goods in which it trades
of Rs 60,00,000. It incurred Rs 600,000 towards freight inwards and Rs 1,20,000
towards wages to make the goods ready for sale. At the end of the year, 15,000 units
were in stock. The closing stock and of 15,000 units should be valued at Rs ………
12. From the following information supplied by Mr. Neeraj Aggarwal, prepare a
Balance Sheet of Mr. Neeraj Aggarwal as on 31st March 2022
Rs.
Capital 50,000
Land 15,000
B/R 25,000
Sundry Creditors 30,000
Plant and Machinery 58,000
Investments 5,000
Cash in hand 1,000
Cash at Bank 1,000
Stock at the end 10,000
Bank Overdraft 8,000
Bank Loan 20,000
Net Profit 10,000
Drawings 3,000

13. Below tabulated information was derived from the TB report of M/s. Seeta
Enterprises. Draft a Trading as well as P & L a/c for the annual period ending Mar‘
2022.

20
 Understanding and
Particular Amount Particular Amount Analysis of Financial
Rs Rs. Statements
Machinery 4,00,000 Capital 9,00,000
Cash at Bank 1,00,000 Sales 16,00,000
Cash in Hand 50,000 Sundry Creditors 4,50,000
Wages 1,00,000 Interest Received 30,000
Purchases 8,00,000
Stock on 1st April 2017 6,00,000
Sundry Debtors 4,40,000
Bills Receivable 2,90,000
Rent 45,000
Commission 25,000
General Expenses 80,000
Commission 50,000
29,80,000 29,80,000
Additional Information:
(i) Outstanding commission were ` 45,000.
(ii) Depreciation on Machinery at 10%.
(iii) Outstanding wages were ` 5,000.
(iv) Rent prepaid ` 10,000.
(v) Interest on capital 5% per annum.
(vi) Stock on 31st March 2022 ` 8,00,000.
Prepare Trading and P&L A/c for annual period ending March 2022 and Balance
Sheet so that period itself.
14) For the annual year ending Mar‘22, the Trial balance report for M/s Rakesh & Co.
were generated. You are required to make annual final account statement for the same
period. This requires incorporating following modified entries.

1. Depreciation: 5% of plant and machinery and 10% of fixtures and fittings.

2. Reserve for bad debts 2.5% on Sundry Debtors
3. Insurance unexpired on 31st March 2022 Rs. 70
4. Outstanding wages Rs. 800 and Salaries Rs. 350.
Trial Balance
Rs
Machinery 55,000
Fixtures 1,720
Factory Fuel 542
Salaries 3,745
Lighting (Factory) 392
Travelling Expenses 925
Carriage outward 960
Bank Balance 2,245
Bills Receivable 47,800
Net Purchases 66,710
Wages 9,915
Rent and Taxes 1,915
Office Expenses 2,778
Carriage Inward 897
Discount allowed 422
Drawings 6820
Stock 1 April 2021 21,725
Manufacturing Expenses 2,680
Sales Return 7,422
Insurance 570
21
Preparation and Analysis Closing Stock 16,580
of Final Accounts
Rent Outstanding 150
`Capital 93,230
Sales 1,26,177
Sundry Creditors 22,680
Purchase Return 3,172
Bills Payable 6,422

4.13 SOLUTIONS / ANSWERS

☞ Check Your Progress – 1

i) Gross Profit Rs. 86,000
ii) Net purchase= Purchase- Purchase Returns
iii) Net sales= Sale- Sale Returns
iv) Carriage Inward, Power, Freight, Octroi, Wages
v) Gross Profit Rs 8,00,000

☞ Check Your Progress – 2

1.
(i) Gross Profit - It is the amount (difference) between sales - cost of sales.
Net Profit - The amount of gross profit left after allowing for all
expenses.
(ii) Trading Account - The trading account shows the result of buying and
selling goods.
P & L a/c.- This account shows the summary of changes in the owner‘s
capital/equity/claim resulting from the operations of a firm in the given period
of time.

2. Debited in the P & L accounts are - Salaries, Rent paid, Advertisement,

Depreciation, Stationery, Miscellaneios Expenses.
Credited in P & L accounts are – Income received from dividend, interest,
commission, sale of fixed assets, transfer fee, interest on drawings etc.

3. G.P Rs. 30,000 and N.P Rs. 10,600

☞ Check Your Progress – 3

i) (a) accounting period (b) calendar year (c) financial year
ii) (a) Total asset (b) Total liability (c) Owners Equity

iii) (a) current asset (b) fixed assets (c) tangible assets

iv) (a) Current Liabilities (b) long-term liabilities (c) shareholders‘ funds.

☞ Check Your Progress – 4

A. Liquidity
B. (a) T account form (b) Report form
C. Is time taken by a unit to convert goods into sales and to collect money from
debtors?
D. Lower of cost or market price
22
 Understanding and
E. Sundry debtors Analysis of Financial
F. Depreciation Statements
G. Amortization
H. Accounts payable
I. Accounting year
J. Cash
K. Liquidity
L. ‗Lower of cost or market price‘.
M. Bad debts.
N. Bills receivable.
O. Raw material (ii) Work-in-Process (iii) Finished goods.
P. Historical cost- Depreciation.
Q. Assets, Liabilities, and capital
R. Owners‘ equity
S. Liabilities
T. Profits
U. Sundry creditors
V. Sundry debtor
W. Original cost
X. Contributed capital and retained earnings
Y. Assets = Liabilities + Owner‘s Equity
Z. Going concern.

☞ Check Your Progress – 5

1.
A. Wages should be credited to the Trading account False
B. Freight outward should be debited to the trading account False
C. Prepaid expenses are a part of current assets. True
D. Provision for doubtful debts is a liability False [It
is a reduction of an assets]
E. Closing stock, when appearing in the trail balance, should be taken directly to the
balance sheet. True

2. Use of Forensic Accounting - 1 Bank Frauds, 2 - SEBI for Insider trading, Shell
Companies, 3. Bank frauds; 4. Insolvency cases

Answer to Self Assessment Questions/Exercises

11. Rs 3,36,000
12. Balance Sheet total -Rs.1,15,000
13. Balance Sheet total -Rs. 20,50,000. Net Profit Rs. 6,50,000, Gross Profit Rs.
8,95,000

14. Balance Sheet total Rs. 1,19,366. Net Profit Rs. 2,554, Gross Profit Rs. 18,266.

4.14 REFERENCES AND FURTHER READINGS

1. Ashok Sehgal and Deepak Sehgal, ―Advanced Accounting‖, Taxman Allied
Services (P) Ltd.
2. Bhabatosh Banerjee, ―Financial Policy and Management Accounting‖, PHI
Learning Private Limited.
3. R.K. Sharma and R.S. Popli, ― Financial Accounting” , Kitab Mahal, New
Delhi.
23
Preparation and Analysis 4. J.R. Monga and Girish Ahuja, ― Basic Financial Accountinng” , Mayur
of Final Accounts
Paperbacks,
5. Horngren C.T. and Harrison, ― Financial Accounting”, Prentice Hall: New
Delhi (Chapter 1).
6. Fraser Lyn M. and Aileen Ormiston, ― Understanding Financial Statements” ,
Prentice Hall: New Delhi (Chapter 2).,2003.
7. Glantier M. W. E., Underdown B. and A.C. Clark , ―Basic Accounting
Practice‖ , Arnold Hieneman: Vikas Publishing House, New Delhi (Chapter
5, Section 2), 1979.
8. Bhattacharya, S. K. and John Dearden, ― Accounting For Management:
Text and Cases,”, 2nd Ed Vani Pub. , New Delhi. (Chapter 3, 10 and 11).
9. Hingorani, N.L. and A. R. Ramanathan, ― Management Accounting” , 1986,
Sultan Chand: New Delhi. (Chapter 3).
10. Pandey IM, ―Financial Management‖, Vikas Publishing House Pvt. Ltd, New
Delhi, 2020.

24