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Concept of Proforma Invoice 1

Last Updated On: 27-Oct-2021Posted On: 27-Oct-2021

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Comparison method Performa of Statement of Affairs Statement of Affairs as at ……. Liabilities Amount Assets Amount Bills Payable xxxxx Land and Building xxxx Creditors xxxxx Plant and Machinery xxxx Outstanding Expenses xxxxx Furniture xxxx Income received in advance xxxxx Stock xxxx Capital (balancing figure) xxxxx Debtors/Bills Receivable xxxx Cash and Bank xxxx Prepaid Expenses xxxx Accrued Income xxxx Total XXXXX Total XXXXX Steps: ● Determine the Opening Capital by preparing the Statement of Affairs at the beginning of the year. ● Determine the Closing Capital by preparing the statement of affairs at the end of the year. ● Add drawings made by the proprietor to the closing capital during the year. ● Deduct the additional capital introduced by the owner during the year. ● Find out the Profit or Loss by deduction the opening capital from the adjusted closing capital. ● If the adjusted closing capital exceeds the opening capital, it represents profit and vice versa. Ascertainment of profit under single entry system: Statement of affairs is a statement of all assets and liabilities as on a particular date. The difference between the two sides is regarded as capital-balancing figure. It is based on the equation Capital=Assets-Liabilities.

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