rom the following transactions write 2021 Jan. 1 Cash in hand 5 Paid to Ram Received Discount 9 Purchased goods for Cash. 11 Cash Sales 15 Paid to Bose & Company 17 Received from Mohan Allowed him discount 20 Received from Talukdar Allowed him discount 23 Paid Wages 25 Paid Electricity charges 27 Purchased Typewriter for 30 Received from Atma Ram 31 Bought Stamp
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
![17 Gave to Sohan & Sons
18 Purchased in Cash from Mohan
20 Received from Mewa Lal
Allowed him Discount
24 Paid office expenses
4,000
OS08 3,000
20
1,000
Ans. Dr. Cash Balance 26,000; Dr. side Discount Total 200, Cr. side Discount Total 250]
. From the following transactions write up a Double Column Cash Book with Cash and Discount Columns :
15,000
3,950
2021
1 Cash in hand
5 Paid to Ram
Jan.
11
50
Received Discount
1,000
5,000
2,850
6,900
9 Purchased goods for Cash
23
11 Cash Sales
15 Paid to Bose & Company
17 Received from Mohan
100
Allowed him discount
14,890
20 Received from Talukdar
Allowed him discount
23 Paid Wages
25 Paid Electricity charges
27 Purchased Typewriter for cash
30 Received from Atma Ram
110
500
600
99
8,000
7,000
20
31 Bought Stamps
[Ans. Dr. Cash Balance 31,870; Dr. Discount Total 210; Cr. Discount Total 50]
(ii) Cash Book with Bank and Discount Columns
Enter the following transactions in Cash Book with Bank and Discount Columns of Mr. P.K. Jha, Katihar :
2021
July
1. Balance of Bank
10,200
750
2 Paid to Shiv
10 Purchased goods and paid by cheque
15 Cash Sales
19
5.
33
17 Received Cash from Neeta](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9c07e189-7f38-408d-a3cb-01845da6b0d5%2Fd97a8719-a7e1-4992-b319-3d24d9c83b9f%2F1b7apwp_processed.jpeg&w=3840&q=75)
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