WEEKLY RECAP

https://forms.gle/ryabjYpesfVUx7ft5
BUSINESS NEWS
THINK

• Is it necessary to
provide financial
information for
sound management
decision.
LEARNING OBJECTIVE

• To analyse the meaning

of financial statement
and appraise the
objective of preparing
financial statement.
Arabic word of al-qawaim
financial malia
statement
‫القوائم المالية‬
DIFFERENTIATED
GROUP
ACTIVITY
 Collaborative Learning:-To analyse
Activities financial statement.

Think Ink pair share-To appraise the

objective of financial statement.

Research-How the information provided by

financial statement used by
managers, investors, creditors,
employees, government etc..
Group -1
State the meaning and features of Financial Statements.
Group-2
Find out the objective and purpose of financial Statements.
Group-3
Research on how the information provided by financial statement
used by managers, investors, creditors.
Group-4
Research on how the information provided by financial statement
used by employees, government,Tax authorities, researchers.
 Summary
Statements that contain financial information about business which can
satisfy the information requirements of internal and external users are
known as financial statements.

It serve as a source of financial information that caters to diverse

information requirement of users.

It is prepared with the purpose of representing a true and fair view

of business.

To do so it requires the creation of three statements namely, trading

and profit and loss account and balance sheet.

The financial statements related to gross/net profit or loss, the

assets and liabilities. 
The users of information can be the following:

Current Owners: These internal users would like to know the

profits in the previous accounting period and current
position of the assets and liabilities.

Government: Government is an external user and want to know

the financial position of a business so that stakeholder’s
rights are protected.

Prospective Owner: These external users would like to know

the past profits and financial position and also the future
performance of the business to make an informed decision
whether to invest in the business or not
 Preparation of Annual Financial Statements in Dubai
• A Dubai limited liability company is required to prepare
the annual financial statements under IFRS
(International Financial Reporting Standards). In
agreement with IFRS, holding enterprises are demanded to
prepare and organize enhanced audited financial
statements each year. Consolidation is not mandatory if
the business is a transitional holding company. A
holding company will prepare the consolidated financial
statements under the official accounting criteria. 
Assessment

Peer assessment and peer correction

 Problem 1
From the following balances extracted from the books of M/s Ahuja and Nanda. Calculate the
amount of:
Group-1,4-Cost of goods available for sale(hint-Opening Stock + Net Purchases + Wages)

Group-2,3-Cost of goods sold during the year(Opening Stock + Net Purchases + Wages – Closing Stock
or Net Sales – Gross Profit)
+ Opening stock 25,000
+ Credit purchases 7,50,000
+ Cash purchases 3,00,000
+ Credit sales 12,00,000
+ Cash sales 4,00,000
+ Wages 1,00,000
+ Salaries 1,40,000
+ Closing stock 30,000
+ Sales return 50,000
+ Purchases return 10,000
Cost of Goods Available for Sales
= Opening Stock + Net Purchases + Wages
= 25,000 + 10, 40,000 + 1, 00,000
= ₹ 11, 65,000

(b) Cost of Goods Sold = Opening Stock + Net Purchases + Wages – Closing Stock
= 25,000 + 10, 40,000 + 1, 00,000 – 30,000
= ₹ 11, 35,000
       Or
Cost of Goods Sold = Net Sales – Gross Profit
= 15, 50,000 – 4, 15,000
= ₹ 11, 35,000
Problem 2
From the following balances taken from the books of Simmi
and Vimmi Ltd.for the year ending March 31, 2021,
calculate the gross profit.
(hint G/P=N/s+c/s-(net purchase+o/s+Direct expenses)

• Closing stock 2,50,000

• Net sales during the year 40,00,000
• Net purchases during the year 15,00,000
• Opening stock 15,00,000
• Direct expenses 80,000
Trading Account as on March 31, 2017
Dr. Cr.
Particulars Amount₹ Particulars Amount₹
Opening Stock 15,00,000 Net Sales 40,00,000
Net Purchases 15,00,000 Closing Stock 2,50,000
Direct Expenses 80,000
Gross Profit 11,70,000
42,50,000 42,50,000

Therefore, the Gross Profit is ₹ 11, 70,000.

Home Task

Find out the statement which shows results

of business operations during an accounting
period, Write about its parts.