preparing of profit and Loss account

Bad Credit Student Loans - preparing of profit and Loss account

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Explanation of sure items of behalf and Loss Account

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Bad Credit Student Loans

1. Salaries

Salaries are paid for the services of employees and are debited to behalf and loss ac- count being indirect expense. If any wage has been paid to proprietor or partners, it should be shown separately because it requires extra medicine at the time of earnings tax assessment.

2. Salaries and Wages

When wages account is included with salaries it treated is as indirect charge and is taken into behalf and loss account.

3. Rent

Rent of the office shop showroom or godown is an indirect charge and so is debited to behalf & loss account. However, rent of facility is debited to trading account. When a part of the construction has been sublet the rent received should be shown on the reputation side of behalf and loss account as a separate item.

4. Rates and Taxes

These are levied by the local authorities to meet social expenditure. It being an indirect expenditure is shown on the debit side of behalf and loss account.

5. Interest

Interest on loan, overdraft or overdue debts is payable by the firm. It is an indirect expense; so debited to behalf and loss account. Interest on loan developed by the firm on depositor investments is an earnings of the firm and so is credited to the behalf and loss account.

If firm has paid any interest on capital to its proprietor or partners it should also be debited in the behalf and loss account but separately because this item needs extra medicine at the time of income-tax assessment.

6. Commission

In firm sometimes agents are appointed to consequent sales, who are paid commission as their remuneration. So this being a selling expenses is shown on the debit side of behalf and loss account. Sometimes commission is also paid on purchases of goods, such 'as charge should be debited in the trading account. Sometimes the firm can also act as an agent to the other firm houses and in such cases it receives commission from them. Commission so received is shown on the reputation side of behalf and loss account.

7. Trade Expenses

They are also termed as 'sundry expenses'. Trade expenses characterize expenses of such a nature for which it is not worthwhile to open separate accounts. Trade expenses are not taken to trading account.

8. Repairs

Repairs to the plant, machinery, construction are indirect expenses are treated charge and are debited to behalf and loss account..

9. Traveling Expenses

Unless mentioned otherwise, traveling expenses are treated as indirect expenses and are debited to behalf and loss account.

10. Horse & carport Expenses

Expenses incurred for the fodder of horses and wages paid for looking after carport are treated as indirect expenses and debited to behalf and loss account.

11. Apprentice Premium

This is the whole charged from persons to whom training is imparted by the business. It is an earnings and is credited to behalf and loss account. In case apprentice superior is charged in develop for two or three years, then the whole is distributed over whole of years and each year's behalf and loss account is credited with its share of income.

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