ACKNOWLEDGEMENT

I have taken efforts in this project. However, it would

not have been possible without the kind support and
help of many individuals and organizations. I would
like to extend my sincere thanks to all of them.

I thank my God for providing me with everything

that I required in completing this project. I am highly
indebted to the teacher in charge Miss. Dileswari
Bhoi for her guidance and constant supervision as
well as for providing necessary information regarding
the project and also for her support in the
completion of this project.

I would like to express my gratitude towards my

parents for their kind cooperation and
encouragement which helped me in the completion
of this project.

My thanks and appreciation also go to my

classmates in developing the project and to the
people who have willingly helped me out with their
abilities.

Anannya Poddar,
+2 second year
Section – A
 CERTIFICATE
This is to certify that the content of this
project by Miss Anannya Poddar is the bonafide
work of her submitted to Gangadhar Meher
Higher Secondary School, Sambalpur for
consideration in partial fulfillment of the
requirement of CHSE, Odisha for the award of
+2 Certificate in Commerce.
The original research work was carried out
by him under my supervision in the academic
year 2021-22 on the basis of the declaration
made by him. Recommend this project report
for the revaluation.

Miss Dileswari Bhoi

Project Guide
Signature:
Place: Sambalpur
 CONTENTS
Sl. Title Page Remarks Signature
No.
No.

1. Comprehensive Problem 5

2. Journal 6

3. Ledger 9

4. Trial Balance 16

5. Trading and Profit & Loss 19

A/c

6. Balance Sheet 20

7. Conclusion 21
 Comprehensive Problem
PASS THE JOURNAL ENTRIES (WHICH SHOULD HAVE AT LEAST 20
TRANSACTIONS WITHOUT GST), POST THEM INTO THE LEDGER,
PREPARE A TRIAL BALANCE BY BALANCE METHOD-
On 1st November, 2020 Mr. Rachit started a readymade garments
business in Lalitpur. Mr. Rachit invested Rs. 50, 00,000.
November 2 – Cash deposited into the bank Rs.30, 00,000.
November 2 – Goods purchased for cash Rs. 8, 00,000 at 25% trade
discount.
November 3 – Sewing machinery purchased for cash Rs. 5, 50,000 and
installation expenses paid Rs. 50, 000.
November 10 - Goods purchased from Dinesh & Company
Rs. 12, 50,000 at 20% trade discount.
November 12 – Goods sold to Mohit & Brothers Rs. 20, 00,000 at 40%
trade discount.
November 15 – Amount paid to Dinesh & Company by cheque
Rs. 4, 00,000.
November 16 – Furniture purchased paid by cheque Rs. 1, 50,000.
November 18 – Cheque received from Mohit & Brothers Rs. 8, 00,000
and deposited into bank same day.
November 19 – Goods purchased from Dinesh & Company
Rs. 10, 00,000 at 20% trade discount
November 20 – Goods sold for cash Rs. 5, 00,000.November 21 –
Goods sold to Mohit & Brothers Rs. 10, 00,000 at 20% trade discount.
November 24 – Insurance premium paid Rs. 20, 000 by cheque.
November 25 – Cash received from Mohit & Brothers Rs. 2, 00,000.
November 26 – Cash paid to Dinesh & Company Rs. 1, 50,000.
November 27 – Commission received Rs. 20, 000.
November 29 – Cash withdrawn for personal use Rs. 40, 000.
November 30 – Salary Rs. 25, 000, Rent Rs. 16, 000 paid by cheque

JOURNAL
A Journal is a record of financial transactions in chronological (date-
wise, starting from the earliest to the latest date) order. Journal is also
known as Book of Original Entry. The word ‘Journal’ has been derived
from the French word ‘Jour’ which means ‘day’. Journal, therefore
means a daily record of business transactions. Thus, Journal is the book
of primary entry in which every transaction is recorded before being
posted into the ledger.
STEPS INVOLVED IN JOURNALISING/PROCEDURE OF JOURNALISING
1. Analyze each transaction in terms of accounts affected.
2. Finding two accounts/aspects affected.
3. Determination of nature of account affected i.e. personal, real, or
nominal (traditional approach is followed) or determine which is
affected i.e. assets or liabilities, expenses or revenue capital
(Modern approach is followed.)
4. Apply the rule of debit and credit to each type of account involved
5. Recording of transactions in book of journal.
DATE PARTICULAR L.F DEBIT CREDIT
November 18 Bank A/c Dr 8,00,000

To Mohit & Brother’s A/c 8,00,000

(Being cheque received from Mohit & Brother’s

Rs.8,00,000 and deposited into bank same day)

November 19 Purchase A/c Dr 8,00,000

To Dinesh & Company’s A/c 8,00,000

(Being Goods purchased on credit from Dinesh &

company at 20% trade discount)

November 20 Cash A/c Dr 5,00,000

To Sales A/c 5,00,000

(Being goods sold for cash)

November 21 Mohit & Brother’s A/c Dr 8,00,000

To Sales A/c 8,00,000

(Being goods sold on credit at 20% trade discount)

November 24 Insurance premium A/c Dr 20,000

To Bank A/c 20,000

(Being insurance premium paid by cheque)

November 25 Cash A/c Dr 2,00,000

To Mohit & Brother’s A/c 2,00,000

(Being cash received from Mohit & Brother’s)

November 26 Dinesh & Company’s A/c Dr 1,50,000

To Cash A/c 1,50,000

(Being cash paid to Dinesh & Company)

November 27 Cash A/c Dr 20,000

To Commission received A/c Dr 20,000

(Being Commission received)

November 29 Drawing A/c Dr 40,000

To Cash A/c 40,000

(Being Cash withdrawn for personal use)

November 30 Salary A/c Dr 25,000

Rent A/c Dr 16,000

To Bank A/c 41,000

(Being salary and rent paid by cheque)

TOTAL OF JOURNAL 1,60,71,000 1,60,71,000

LEDGER
Ledger is the principal book of accounts where similar transactions
relating to a particular person or property or revenue or expense are
recorded. It is a set of accounts. It contains all accounts of the business
enterprise whether real, personal, nominal. It is called as the ‘Principal
Book’ or ‘main book’ or ‘Chief book’.
DEFINATIONS
According to L. C. Cropper, “The book which contains a classified and
permanent record for the transactions of a business is called a Ledger.”
According to J. R. Batliboi, “The Ledger is the chief book of accounts,
and it is in this book that all business transactions would ultimately find
their accounts in a duly classified form.”

LEDGER
Cash Account
Dr. Cr.
Date Particulars J.F. Amount Date Particulars J.F. Amount
2020 Rs. 2020 Rs.
November1 To Capital A/c November2 By Bank A/c
50, 00,000 30, 00,000
November6 To Sales A/c 7, 00,000 November3 By Purchase A/c 6, 00,000

November20 To Sales A/c 5, 00,000 November4 By Machinery A/c 6, 00,000

November25 To Mohit & 2, 00,000 November26 By Dinesh & 1, 50,000

Brothers A/c Company A/c
To Commission November29 By Drawing A/c 40, 000
November27 Received A/c 20, 000
By Balance c/d 20, 30,000
November30
64, 20,000 64, 20,000
To Balance b/d 20, 30,000

Capital Account
Dr. Cr.
Date Particulars J.F Amount Date Particulars J.F Amount
2020 Rs. 2020 Rs.
November30 To Balance c/d 50, 00,000 November 1 By Cash A/c 50, 00,000

50, 00,000 50, 00,000

50, 00,000

December 1
By Balance b/d

Bank Account
Dr. Cr.
Date Particulars J.F Amount Date Particulars J.F Amount
 2020 Rs. 2020 Rs.
November2 To Cash A/c By Computer A/c
30, 00,000 November 5 50, 000

November18
To Mohit & 8, 00,000 November15 By Dinesh & 4, 00,000
Brothers A/c Company’s A/c
By Furniture A/c
November 16
1, 50,000

By Insurance
premium A/c 20, 000
November 24

By Salary A/c
25, 000
November 30
By Rent A/c
16, 000
November 30
By Balance c/d

November 30 31, 39,000

38, 00,000 38, 00,000

To Balance b/d 31, 39,000

December 1

Purchase Account
Dr. Cr.
Date Particulars J.F Amount Date Particulars J.F Amount
 2020 Rs. 2020 Rs.
November 3 To Cash A/c 6, 00,000
November30 By Balance c/d 24, 00,000
November10 To Dinesh & 10, 00,000
Company’s A/c
November1
9 To Dinesh &
Company’s A/c 8, 00,000

24, 00,000 24, 00,000

December1 To Balance b/d 24, 00,000

Machinery Account
Dr. Cr.
Date Particulars J.F Amount Date Particulars J.F Amount
2020 Rs. 2020 Rs.
November 4 To Cash A/c 6, 00,000 November 30 By Balance c/d 6, 00,000

6, 00,000 6, 00,000

6, 00,000

December 1
To Balance b/d
 Computer Account
Dr. Cr.
Date Particulars J.F Amount Date Particulars J.F Amount
2020 Rs. 2020 Rs.
November 5 To Bank A/c 50, 000 November 30 By Balance c/d 50, 000

50, 000 50, 000

50, 000
December 1
To Balance b/d

Sales Account
Dr. Cr.
Date Particulars J.F Amount Date Particulars J.F Amount
2020 Rs. 2020 Rs.
November30 To Balance c/d 32, 00,000 November 6 By Cash A/c 7, 00,000

November 12
By Mohit & 12, 00,000
Brothers’ A/c

November 20 By Cash A/c

5, 00,000

By Mohit &
November 21 Brother’s A/c 8, 00,000
 32, 00,000 50, 00,000

By Balance b/d 50, 00,000

December 1

Dinesh & Company’s Account (Creditors)

Dr. Cr.
Date Particulars J.F Amount Date Particulars J.F Amount
2020 Rs. 2020 Rs.
November15 To Bank A/c 4, 00,000 November10 By Purchase A/c 10, 00,000

November26 To Cash A/c 1, 50,000 November19

By Purchase A/c 8, 00,000

November30 To Balance c/d

12, 50,000

18, 00,000 18, 00,000

12, 50,000
By Balance b/d
December 1

Mohit & Brothers’ Account (Debtors)

Dr. Cr.
 Date Particulars J.F Amount Date Particulars J.F Amount
2020 Rs. 2020 Rs.
November12 To Sales A/c November18 By Bank A/c
12, 00,000 8, 00,000

November21 To Sales A/c November25

8, 00,000 By Cash A/c 2, 00,000

November30
By Balance c/d 10, 00,000

20, 00,000 20, 00,000

To Balance b/d 10, 00,000

December1

Furniture Account
Dr. Cr.
Date Particulars J.F Amount Date Particulars J.F Amount
2020 Rs. 2020 Rs.
November16 To Bank A/c 1, 50,000 November 30 By Balance c/d 1, 50,000

1, 50,000 1, 50,000

December 1 To Balance b/d 1, 50,000

 Insurance Premium Account
Dr. Cr.
Date Particulars J.F Amount Date Particulars J.F Amount
2020 Rs. 2020 Rs.
November 30 By Balance c/d
November 20, 000 20,000
24 To Bank A/c
20, 000 20, 000

20, 000

December 1
To Balance b/d

Commission Received Account

Dr. Cr.
Date Particulars J.F Amount Date Particulars J.F Amount
2020 Rs. 2020 Rs.
November30 To Balance c/d 20, 000 November 27 By Cash A/c 20, 000

20 ,000 20, 000

20, 000

December 1
By Balance b/d

Drawing Account
Dr. Cr.
Date Particulars J.F Amount Date Particulars J.F Amount
2020 Rs. 2020 Rs.
November30 To Cash A/c 40, 000 November 30 By Balance c/d
 40, 000

40, 000 40, 000

40, 000

December 1 To Balance b/d

Salary Account
Dr. Cr.
Date Particulars J.F Amount Date Particulars J.F Amount
2020 Rs. 2020 Rs.
November30 To Cash A/c 25, 000 November 30 By Balance c/d 25, 000

25, 000 25, 000

25, 000

December 1 To Balance b/d

Rent Account
Dr. Cr.
Date Particulars J.F Amount Date Particulars J.F Amount
2020 Rs. 2020 Rs.
November30 To Bank A/c 16, 000 November 30 By Balance c/d 16, 000

16, 000 16, 000

16, 000
 To Balance b/d
December 1

TRIAL BALANCE
It is a statement prepared to check arithmetical accuracy of entries
passed.

Objectives of Trial Balance:-

● To check arithmetical accuracy.
● To facilitate preparation of final accounts.
● To complete double entry book keeping.

Rules for preparing trial balance:-

● All assets, expenses, losses show debit balance.
● All income, gain, revenue, liability show credit balance.
● Capital shows credit balance.
● Drawings show debit balance.
● Sales and Purchase Return/ Return outward show credit balance.
● Purchase and Sales Return/ Return inward show debit balance.
● Provisions and reserves show credit balance.
Trial balance (Balance method)
Under this method of preparing trial balance, all balances of ledger
accounts are taken, all debit balances are placed in the debit column
and all credit balances are placed in the credit column. If the total of
both the columns is agreed, we assume the entries are correct.
 TRIAL BALANCE
(BALANCE METHOD)
As on 30th November, 2020

Name of Accounts L.F Debit Credit

Balance Balance
(Amount)
(Amount)
Rs. Rs.
Cash Account 20, 30,000 ---------------
Capital Account --------------- 50, 00,000
Bank Account 31, 39,000 ---------------
Purchase Account 24, 00,000 ---------------
Machinery Account 6, 00,000 ---------------
Computer Account 50, 000 ---------------
Sales Account -------------- 32, 00,000
Dinesh & Company (Creditors) -------------- 12, 50,000
Mohit & Brothers (Debtors) 10, 00,000 ---------------
Furniture Account 1, 50,000 ---------------
Insurance Premium Account 20, 000 ---------------
Commission Received Account ------------- 20, 000
Drawing Account 40, 000 ---------------
Salary Account 25, 000 ---------------
Rent Account 16, 000 ---------------

TOTAL 94, 70,000 94, 70,000

TRADING AND PROFIT & LOSS ACCOUNT

Trading Account:-
The term ‘trade’ means buying and selling, hence it is an account which
shows the results of buying and selling of goods. In other words Trading
Account is the first part of income statement which is prepared to
ascertain the gross profit or gross loss for a given accounting period.
By preparing this account trader wants to know the profitability on
account of goods purchased and sold.
Gross Profit: - It is the excess of net sales proceeds over the cost of
goods sold. In other words, it is the excess of credit side of trading
account over debit side. It is transferred to credit side of Profit & Loss
Account.
Gross Loss: - It is the excess of cost of goods sold over the net sales
proceeds. In other words, it is the excess of debit side of trading
account over credit side.
 Important Note:-
● It is transferred to debit side of Profit & Loss Account.
● In trading account, closing stock is shown at cost price or net
realizable market value whichever is lower.
● Only the direct expenses which are incurred to bring goods into
saleable condition like freight, insurance, carriage inwards, fuel,
power, and royalties on production, consumption of store etc. are
taken into account to calculate gross profit/loss.

Trading Equation: -
Net Sales = Cost of goods sold + Gross Profit/Gross Loss
Trading and Profit & Loss Account
(For the year ended on 30th November, 2020)
Particulars Amount Particulars Amount
Rs. Rs.
To Purchase A/c 24, 00,000 By Sales A/c 32, 00,000
To Gross Profit c/d 8, 00,000
32, 00,000 32, 00,000

To Insurance Premium A/c 20, 000 By Gross Profit b/d 8, 00,000

To Salary A/c 25, 000 By Commission Received 20, 000
To Rent A/c 16, 000 A/c
To Net Profit transferred to 7, 59,000
Capital A/c

8, 20,000 8, 20,000

BALANCE SHEET
Balance sheet is a statement which shows the financial position i.e. the
balance of assets, liabilities and capital of a business entity at a given
date. It is prepared from the real accounts and personal accounts of
trial balance. A debit balance is a real account or personal account
represents an asset of the concern/firm. Likewise a credit balance in a
personal account represents a liability. There can be some newly
opened accounts as well on account of adjustment entries. The assets
and liabilities are arranged in a proper way and the resultant statement
is the balance sheet. On the right side, assets are arranged while on the
left hand side, liabilities are recorded.

Note: -
● Totals of the two sides of the balance sheet must agree because
of the equation, viz. Assets = Liabilities + Capital.
● There is a difference; it means that there is some mistake.
● Difference, if it does occur, should be placed on the deficit side as
Suspense Account to make the two sides agree apparently.
Marshalling of Balance sheet: - Arrangement of assets and liabilities in
accordance with a particular order is known as marshalling of balance
sheet.
The items in the balance sheet are generally marshalled in two ways: -
 1. Liquidity order or according to time: - In liquidity order, the
assets are stated in the order in which they can be easily
converted into cash and the liabilities in the order in which they
have to be paid off.
2. Permanence order or according to purpose: - In permanence
order, assets which are to be used permanently in the business
and are not meant for sale are shown first and the assets that are
liquid are shown last in order. Similarly, liabilities may also be
shown according to the permanence arrangement.
BALANCE SHEET (As at 30th November, 2020)
Liabilities Amount (Rs.) Assets Amount (Rs.)
Capital 50, 00,000 Machinery 6, 00,000
Add: Furniture 1, 50,000
Net Profit 7, 59,000 Computer 50, 000
57, 59,000 Debtors 10, 00,000
Less: Cash in hand 20, 30,000
57, 19,000
Drawings 40, 000 Cash at bank 31, 39,000
12, 50,000
Creditors
69, 69,000
69, 69,000

CONCLUSION
Efficiency of Mr. Rachit’s readymade garment business is quite good
since Gross Profit Ratio and Net Profit Ratio are sufficiently higher than
the norms set for same type of business enterprises.
REFERENCE
 A
Project Report
On
Final Accounting
(A Case study of M/s Rachit)

Gangadhar Meher Higher Secondary School

Name: Anannya Poddar
Class No: IC20-015
Registration No:
Session: 2021-22
Subject: Accountancy
Stream: Commerce
Date:
Place: Sambalpur Signature of Student

Signature of External Signature of Internal