Financial statements of sole Proprietorship

Income Statement

1. it is a nominal account.
2. it has two parts

(a) Trading Account : for calculating gross profit/loss.
(b) Profit and Loss account : for calculating net profit/loss.

Note : all direct expenses are debited to Trading account and all indirect expenses are debited to Profit and Loss account.

Examples of Indirect Expenses :

(1) Office and admn. Expenses :

(2) Selling and distribution Expenses :

(3) Financial Expenses :

(4) Misc. Expenses :

CBSE Accountancy Class XI ( By Mr. Aniruddh Maheshwari ) 
Email Id : [email protected]