It is very important knowledge that today's whole class is
going to be here.
Okay sir?
Yes sir, absolutely.
Okay, no problem sir, it is ready.
This means that you are going to teach something very
useful.
That is why you will take so much time.
All the coming classes, all the topics, all the questions
will depend on today's lecture.
So see how carefully you listen to today's lecture.
In basic knowledge, we have to cover 1, 2, 3, 4, 5 things.
In basic knowledge, we will cover 5 things.
There is no topic.
Just now we are collecting weapons.
Weapons are being collected.
For war.
Okay sir.
We have to cover 5 things.
First thing.
First thing is this.
Tick tock, tick tock is not at all.
First thing is this.
If I say that I love you, then not at all.
What is the matter, sir?
Tell me the matter.
Two songs came in between.
Cost plus profit is equal to sales.
My belief is that no student should have a problem in this
equation.
If we add profit to our cost, then our sale value comes out.
Okay.
Let me give you my example.
Suppose we have to make a pen drive.
The cost is Rs. 3000.
We add our margin Rs. 1500 to it.
Cost of Rs. 3000.
Rs. 1500.
We said we will add our margin.
So what will be our sale price?
Sir, it's very simple.
The sale price will be Rs. 4500.
That's what I'm saying.
Cost plus profit is equal to sales.
You should know this.
Sir.
This is the most basic thing.
You have crossed the limit.
You are thinking that we do not even know this.
Okay.
I am taking the matter forward.
Keep walking together.
So friends.
If the cost is Rs. 2.
And profit is Rs. 1.
So how much will be the sales?
Sir, let's hide somewhere.
How many questions are you asking us today?
Tell me the truth, sir.
Did you fight at home?
Or what did you eat today?
You are asking such questions to us.
2 plus 1 is equal to 3.
Wait a minute.
Be patient.
2 plus 1 is equal to 3.
Cost plus profit is equal to sales.
Okay.
My important question is this.
If friends, I want to know from you.
How much is my profit in terms of percentage?
You can see in the figures.
Rs. 1.
But if I want to know
How much is my profit in percentage?
Then how will you calculate?
How will you calculate?
There can be two reasons for this.
First, let's assume this.
There can be two reasons for calculating profit.
Which are they?
On the basis of cost.
What I am investing.
How much percentage of it do I earn?
One can be this.
Profit percentage on the basis of cost.
Okay, sir.
And on the basis of sales.
What is the percentage of profit in my sale value?
What is the percentage of profit in my sales?
Profit can always be calculated on two bases.
Remember.
Each and every thing is important.
Each and every thing will be useful.
Whatever I am saying.
Profit percentage can always be calculated on two bases.
How much percentage of cost are you earning?
On the basis of cost.
Or how much percentage of your sale value do you earn?
How much percentage of profit is hidden in sales?
That is on the basis of sales.
Okay, sir.
So tell me.
On the basis of cost.
What is the percentage of profit?
Sir, there is one rupee profit on the cost of two rupees.
So I can say fifty percent.
Fifty percent.
It must be very easy for you.
There is a cost of two rupees.
Half of it is one rupee profit.
And half is called fifty percent.
Yes, sir, you are right.
You are absolutely right.
Yes.
And do you know how we got this fifty percent?
One divided by two into hundred.
This is how fifty percent comes.
That is, we keep the cost below.
Two rupees.
How much profit is there on it?
One rupee.
We will keep it above.
Profit divided by cost into hundred.
This is my fifty percent on cost.
That is, my dear friends.
I earn fifty percent of the cost in profit.
If I want to say the same thing for sales.
That my sales are three rupees.
And there is a profit of one rupee in it.
Then the percentage will come.
Thirty-three point three three percent.
If I make a profit on the basis of sale of three rupees.
Then thirty-three point three three percent.
Profit will come out of sales.
My dear friends.
Yes, sir, absolutely.
In this case, the formula will be.
Profit divided by sales into hundred.
So how can we get the percentage of profit?
One is based on the cost.
Keeping the cost in the base.
Profit divided by cost into hundred.
Or keeping the sales in the base.
On the basis of sales.
Profit divided by sales into hundred.
And do you know what's the fun?
If there is a profit of one by two on the cost.
Profit on sales is one by three.
Did you see a little while ago?
Yes, yes, yes, yes.
That's what I told you.
This series continues in the same way.
What do you mean, sir?
If the profit is one by three on the cost.
Then it will be one by four on the sales.
If the profit is one by four on the cost.
Then it will be one by five on the sales.
This continues in this series.
One by two on cost is equal to one by three on sale.
One by three on cost is equal to one by four on sale.
One by four on cost is equal to one by five on sale.
This continues.
How, sir?
Please tell us.
I'll tell you on the side.
I'll tell you this on the side.
Don't write.
Write only what I have written so far.
Don't write what I'm going to write ahead.
Take this.
Cost plus profit is equal to sales.
Let's move this equation forward.
This time keep the cost at three rupees.
Profit is one rupee.
How much is the sale?
Four rupees.
So I ask you the same thing again.
Take out the percentage of my profit.
So you will say, sir.
There can be two bases.
On the basis of cost.
Or on the basis of sales.
What do you do for cost?
Profit divided by cost into hundred.
That is, one by three.
And what do you do for sales?
Profit divided by sales into hundred.
That is, if it is one by three on the cost.
Then it will be one by four on the sales.
One by four.
One by five.
One by six will continue.
Accept this here.
Accept this.
Okay, sir.
We believe you.
So friends tell me.
Tell me you.
Please tell me my dear friends.
If your question.
If your question tells you.
Dear children.
Find out profit.
Sir, what is profit?
Will ask in the air.
Will also give some data.
And he will give you a given.
One is to tell you the cost.
How much is it?
And tell you that the profit.
It is in percentage.
Fifty percent on cost.
So what will you do?
Tell me a little.
Sir, this is a very simple question.
You asked.
Profit will be.
Cost into fifty percent.
That is, we can say.
Cost into one by two.
If the question tells you the cost.
How much is the cost?
And you also profit.
The percentage of profit.
That too on the basis of cost.
So you have to multiply simple.
And do anything.
In this way.
Nothing else.
In this way.
If the question tells you.
Dear children.
Profit out.
And what should I give you?
Give you.
One is sales.
And tell you.
Profit is.
Thirty three point three three percent.
On sales.
So you don't have to do anything.
To get you out of profit.
Thirty three point three three percent.
Multiply.
With whom?
With the sales value.
The question has given you.
So sir.
There is no problem here.
Question gives cost.
And the percentage of profit.
On the basis of cost.
So multiply the simple cost.
Fifty percent.
If the same question gives sale.
And the percentage of profit.
On the basis of sales.
Then also multiply straight.
With the percentage of sales.
Then also there is no problem.
Do you know where the problem comes?
The question plays a game with us.
Do you know what the question will do to you?
Will say profit out.
Will tell you.
Find out.
Profit.
Will give you the cost.
And the percentage of profit.
Will be told to you.
To use.
He will tell.
Percentage.
On the basis of sales.
Wow.
This will be a mess, sir.
If the cost.
then multiply it by the percentage which comes on the basis
of cost that is 50% and if sales is given then multiply it
by the percentage which comes on the basis of sales
question has given the figure of cost and is asking to
multiply the percentage which comes on the basis of sales
this will be a big mistake, this profit will not come out
right question has given the figure of cost and the
percentage is 33.33% on sales which you affectionately call
1 by 3 on sales now what will happen sir, now
will happen why will the question do this, will the
question do this to test your mind sir remove this mistake,
how will we come out, this is the problem you have said
that if you want profit and the question has given cost
then multiply it by the percentage which comes on the basis
of cost but the question has not given this figure sir, the
question has given the percentage on the basis of sales
friends, why are you afraid, if you can see 1 by 3 on sales
1 by 3 on sales, so I told you a little
ago, convert it to cost 1 by 3 on sales is equal to 1 by 2
on cost oh ho ho means 1 by 3 on sales is given that is it
means 1 by 2 on cost so whatever question has given cost,
multiply it by 1 by 2 i.e.
50% the work will be done, if the question has given you a
percentage on the basis of sales then what is the loss,
what is the loss, convert it to a percentage on the basis
of cost you know how to convert and then multiply it i.e.
you have to multiply here say, if cost given and percentage
also given on cost then multiply it straight away, don't do
much if sales given and percentage of profit also given on
the basis of sales then multiply it straight away don't do
much but if the cost is given but percentage on the basis
of sales is given then firstly convert the percentage on
the basis of sales as a percentage on the basis of cost
then multiply it by cost then multiply it by cost in the
same way last question comes
number 4 question said dear children, make profit sir
question dear children, dear children he is taking our life
he will not take life, keep going you are working hard,
what is the problem find out profit and he will tell you ok
sir so sir if you had told sales value then percentage on
sales will give question will multiply no, question gave
value of sales and percentage gave cost percentage on cost
is given that the profit is 50% that is 1 by 2 on cost sir
sale value to multiply percentage on
percentage on cost simple change it you know if 1 by 2 on
cost then equal to 1 by 3 on sales take this percentage on
sales 1 by 3 is also a percentage don't think why he is not
writing 33.33 should I write 1 by 3 or 33.33 it is same 1
by 2 or 50% it is same so brother your work is done this
time what you have to do for profit, sales value multiply 1
by 3 first we have to convert means if sale value is given
and percentage on basis of cost first convert that
percentage on basis of cost
on basis of sales multiply it is given straight no problem
first convert then multiply this is the first part of basic
knowledge this is the first part of basic knowledge this is
the first part of basic knowledge this is the thing
remember I will repeat cost plus profit is equal to sale
started from this equation cost is 2 rupees, profit is 1
rupee sale is 3 rupees if I want value of profit then I can
see 1 rupee but if I want profit in terms of percentage
then it will come out in two ways once
basis of cost 1 by 2 once on basis of sales 1 by 3 formula
is profit divided by cost into 100 profit divided by sales
into 100 when we consider sale as basis as soon as we
convert into 100 then it will convert into percentage
multiply 1 by 2 into 100 means we are writing it in
percentage rest is same 1 by 2 or 50% in the same way 1 by
3 into 100 convert 1 by 3 into percentage 33.33% rest 1 by
3 or 33.33% rest is same whatever you use, answer will be
same ok sir if cost is given percentage is
given then multiply if sales is given percentage is also
given then multiply if cost is given percentage is also
given then convert and you know how to convert 1 by 2 on
cost is equal to 1 by 3 on sale 1 by 3 on cost is equal to
1 by 4 on sale
This is when after completing the concept, the student
reaches the questions and says that the concept is
complete, but there is mathematics in this chapter.
This chapter is very bad.
So while doing the questions, do not feel that you have
read the concept and the question is not being solved.
That's why you are being told this at the beginning.
Now comes point number 2 in basic knowledge.
Cost in the above equation is a very important point.
It will keep your concept open.
All the children who are still confused about these things,
this second point, third point, fourth point will keep your
mind open.
You see, keep going with me.
The cost used in the above equation is not total cost.
But it is the cost of goods sold only.
What does this mean, sir?
I will prove this to you through an example.
And if my students give the right answer to this example, I
will write the example first and ask you.
If my students give the right answer, then understand.
Understand.
You have started making yourself worthy of thinking about
this chapter.
If you can't give the right answer, then when I tell you
the right answer, you feel that this is a mistake.
Think from this angle.
Write.
In a business, my dear friends, 100 t-shirts were purchased.
There is a t-shirt showroom.
A person sells t-shirts, etc.
So he has bought 100 t-shirts at the rate of 500 rupees.
How much is this?
Sir, this is 50,000 rupees.
50,000 rupees.
Very good.
Then he sold 80 t-shirts out of it.
At the rate of 1000 each.
Sir, it was fun.
Earnings of Rs. 80,000 and expenses of Rs. 50,000.
Profit, sir.
Sales 80,000.
Minus.
Expenses.
Purchase 50,000.
Is equal to 30,000.
This is the profit, sir.
Minus your expenses from your earnings and sales.
50,000.
So the profit is 30,000.
Whoever thinks this is right.
I would like them.
Now you start thinking ahead.
This is not the right profit.
This is wrong.
Now increase my attention.
Some people already felt this wrong.
They should also listen to me.
Is their reason right?
Or they were not thinking anything else.
Brother.
This profit is wrong.
Sir, you are shaking all our Aadhaars.
How can this profit be wrong?
We have only read this.
Sale minus purchase.
I am also telling you the same.
That minus the purchase from the sales.
Take out the profit.
But.
If you have bought sales for 80 t-shirts.
80 into 1000.
Means Rs. 80,000.
So brother.
Why are you taking the purchase of 100 t-shirts?
Purchase is also the same.
You buy only for 80 t-shirts.
That means 100 t-shirts into 500 minus 20 t-shirts into 500.
Purchase is also the same.
You have to buy only for 80 t-shirts.
There is a principle in accounts.
Matching principle.
Matching principle says if you want to make correct
profits, if you want to make true and fair profits, then
income and expense should match.
If you are buying for 80 t-shirts, then purchase only for
80 t-shirts.
Only then you will know how much profit is on those 80
t-shirts.
You are buying for sale of lassi.
You are buying for purchase of 100 t-shirts.
The 20 t-shirts which are not sold yet, how are you
including their purchase cost in the calculation of profit?
How are you making profit on the items which are not sold
yet?
Hold the lines.
The 20 t-shirts which are not sold yet, how are you
including their purchase cost in the calculation of profit?
How are you making profit on the items which are not sold
yet?
Yes, yes, yes.
You have to remove these 20 t-shirts from the purchase.
The stock which you have left, means the items which are
not sold yet, have been saved.
You have to remove the remaining items from the purchase.
If I remove the purchase of 20 t-shirts from 100 t-shirts,
the purchase of 80 t-shirts, the sale of 80 t-shirts is Rs.
The purchase of minus 80 t-shirts is Rs.
Now my correct profit is Rs. 40,000.
The income tax also likes the matching principle.
Why, sir?
You have increased the profit.
The old concept was Rs. 30,000.
The matching concept is Rs. 40,000.
If the profit increases, they will get a good tax.
This is a genuine method.
Remove the items which are not sold from the calculation of
profit.
What did I say above?
I said that the cost of purchasing to get the profit is not
the total cost.
is not the total cost.
My total cost of purchasing was Rs.
But to get the profit, to get the profit, what cost did I
consider?
I considered only the cost of those goods which are already
sold.
I considered only the cost of those 80 t-shirts which are
already sold.
which are already sold.
This is called cost of goods sold.
The first equation cost plus profit is equal to sales.
In this, you are getting the profit.
To get the profit, you have to consider the same cost which
is already sold according to the matching principle.
This cost means cost of goods sold.
This is not the total cost.
This is the cost of goods sold.
This second point is written separately.
Cost used in the above equation is not total cost but it is
the cost of goods sold only.
Okay? Give it a lovely name.
Sir, this is a very long name.
Cost of goods sold.
Do you want to give a short form name?
Okay.
This name is also used in this industry.
COGS COGS COGS COGS COGS COGS COGS COGS COGS COGS COGS COGS
COGS Now, I will improve this equation a little.
Instead of cost, I am going to write a better word.
COGS I told you that the cost is not the total cost.
It is COGS.
That is, we subtract the cost of the remaining stock from
the total cost.
Then we will get COGS.
COGS plus profit is equal to sales.
If I want to know only COGS
It is simple, sir.
Take the profit here and minus it from the sales.
We got one more equation.
The equation is coming out of the equation.
Yes, this is very simple.
COGS plus profit is equal to sales.
We have to subtract COGS.
The question has given sale and profit.
So take the profit there and minus it.
It is very simple.
Okay.
Now write.
Sir, please don't make it difficult.
Now I will not listen.
Now write.
Now Let's understand
Let's understand
COGS in detail.
Now let's understand COGS in detail.
Now what did you see?
Did you see?
To subtract COGS to subtract 40,000 we subtract the stock
from the purchase.
We subtract the stock from the total cost.
But there is not only this in COGS.
There are other things too.
I will try to explain to you with an example.
Write the example.
We purchased 100 T-shirts.
Sir, are you going to take the example of T-shirt today?
Yes.
We will take an example of shoes.
We purchased 100 T-shirts.
At the rate
Rs. 500 each.
My total cost is
Rs. 50,000.
In addition to the purchase, freight expenses also come.
We pick up T-shirts and bring them.
Freight expenses also come.
We asked him how much freight will you take?
He said 100 T-shirts.
I will take Rs. 30 per T-shirt.
He took Rs. 3,000 from us.
The freight guy took Rs.
These T-shirts also have to be packed.
nicely.
Sir, from where we bring it, there is no packing.
We pack it in our name.
By putting our logo.
Think like a big businessman.
Will you keep the T-shirt open like this?
Keep your packing.
So that the packing goes to four places.
So people see where it comes from.
We will also go to this shop from here.
Packing expense.
The expense of packing is Rs.
20 on each T-shirt.
The total is Rs. 2,000.
100 x Rs. 20 per unit.
This is Rs. 2,000.
Now sales are happening of 80 T-shirts.
At the rate
Rs. 80 per unit.
Rs. 80,000.
Find out profit.
We have to find out profit.
Sir, the equation you have told according to your equation
COGS plus profit is equal to sales.
You had written before cost plus profit is equal to sales.
COGS will come instead of cost.
If we talk about this equation then it is very easy to find
out profit.
Sir, you have asked for profit.
Then take COGS here and minus it from sales.
How much is the sales? Rs. 80,000.
If we get COGS more then our work will go on.
We just need COGS.
That's what I'm going to teach you.
How will COGS come out in this case?
The last case was simple.
You just removed the remaining stuff
Here is freight and expense.
There are many things here.
Okay? Okay, sir.
Let's remove COGS.
Working note number 1.
Sir, change the color of the pen.
It's been a long time since you have been writing in this
color.
Take it.
Working note number 1.
Calculation of
Cost of
Goods sold
Calculation of
Cost of goods sold COGS Let's remove COGS.
What is the total cost?
Sir, the total cost is
Purchases total
Rs. 50,000.
Plus freight
Rs. 3000
Plus packing
Rs. 2000
Total cost is
Rs. 55,000
Sir, if we see
What to do to remove COGS?
We have to remove stock from it.
We have to minus stock
Do you know how COGS will come out?
For COGS, you write the total cost.
Purchase Rs.
Plus freight Rs.
Plus packing Rs.
Minus Minus The remaining stock
We have
Closing stock how much is that, if we subtract it from this
then we will get COGS.
In last question we directly minus from purchase this time
freight and packing is also there so we will have to minus
from purchase plus freight plus packing let's do it sir 50
and 3 and 2, it is 55000 out of 55000 we will minus closing
stock, now how will this closing stock come out it is
simple how we subtracted last time we saw how many t-shirts
are left we bought 100 and sold 80 in stock 20 t-shirts are
left we multiplied them by purchase price last time this
time what to do in that add
20 into 30 and in that on top of 20 t-shirts add packing
when here in purchase freight and packing is added then
while subtracting closing stock also freight and packing
will have to be added, why sir the remaining things you
have the remaining 20 t-shirts the freight on those 20
t-shirts was 20 into 30 which is 600rs the packing of those
20 t-shirts is 20 into 20 which is 400rs on these 20
t-shirts freight of 600rs and packing of 400rs is 1000rs
this 1000rs which is spent on those 20 t-shirts
is not yet sold you should minus that only then cost of
goods sold will come we are subtracting the cost of those
t-shirts which are sold so the remaining t-shirts you will
have to subtract their cost, they will not be part of COGS
in that cost packing and freight will also come when you
will subtract it from 20 t-shirts ok sir so how much will
it be 55000 minus 10000 and 11000 our COGS is 44000 so how
much will be our profit 80000 minus 44 means 36000 36000
very good sir very good we are
these things if we go straight to the material questions it
will be very difficult yes let me further take this example
to next year my third point is not yet over my third point
is still going on ok sir continuing this example to next
year if we continue the previous example to next year what
will happen this time as soon as the year starts we already
have 11000 in stock the closing stock of last year will
become the opening stock next year you should know this
much ok sir this year we did not
any opening stock but the closing stock of this year will
become the opening stock next year then we will buy some
more t-shirts 100 t-shirts at the rate 500 each we
purchased for 50,000 this time also we spent freight on 100
t-shirts you will spend freight on what you are buying 30
rupees per unit means 3000 and the cost of packing is also
the same will the cost be the same every time the question
will be different 100 x 20 per unit is 2000 and this time
also we did the same sales 80 t-shirts
sale at the rate 1000 each means our sale is 80,000 the
sale is done 80,000 rupees the same example in the last
example what was the formula of my COGS in the last example
what was the formula of my COGS
Purchases plus Freight and Packing we call these two as
Direct Expense
Freight and Packing is called
Direct Expense what is Direct Expense
Direct Expense on Goods
Direct Expense on Goods why do we do freight because we
purchased goods we do not buy goods we do not buy goods we
do not buy goods that is why it is called Direct Expense so
our formula is Purchase plus Direct Expense in this example
you will get a little more to learn now this formula is
incomplete a little more will come out in this then this
formula will be complete let's start the demand of this
example is also find out profit put your equation brothers
and sisters we have only one
profit is equal to sales minus
COGS COGS plus profit is equal to sales the whole chapter
starts with a small equation and the whole chapter will
continue to move forward how beautiful is this profit is
equal to sales minus COGS how beautiful is this working
note no.1 calculation of COGS
COGS what will happen in cost we will get the purchase what
we did for 50,000 what we did for freight what we did for
packing friends, in all this the opening stock of 11,000
will be added opening stock becomes part of our cost of
goods sold why sir? you will not sell the remaining goods
of last year the sale will be the same as the remaining
goods of last year you will sell what you bought after that
so this remaining stock of last year it will be sold first
this year 80 t-shirts have been
20 were left last year so they would not have been sold
this time we have sold 60 t-shirts this year so you know
that 20 of them will be those that were left last year we
will remove them first and the 60 t-shirts that have been
sold will be sold from the new 100 so the closing stock of
last year it has been sold so it will come in cost of goods
sold it has been sold so it will come in cost of goods sold
so let's add the opening stock we have to minus the closing
stock we had it above so this
11 and 50, 61 66,000 minus closing stock how many t-shirts
are left in the closing stock 20 were left last year, 100
were bought 120 were sold, 80 were sold, 40 t-shirts were
left take their purchase price 500 take the freight of 40
t-shirts into 30 take the packing of 40 t-shirts into 20
this is 66,000 minus how much will it come? 22,000 my god,
what is the fun? 66 minus 22 this is also coming 44,000
I have set the figure like this to explain to you there
will be no confusion at all how much profit will come?
sales minus cogs 44,000 it is still the same 36,000 set the
figure in such a way that you find everything the same the
rest will not be the same every time what is the complete
formula? sir, opening stock plus purchase plus direct
expense minus closing stock minus closing stock now I am
going to give you such a view from which you have never
seen a trading account before do you think I
been talking to you like this for so long? your trading
account your view of the trading account the way you have
been watching the trading account from the 11th class is
going to change in a few seconds you will say sir
I have never felt such a trading account this is how the
trading account happens
I had kept the rat now you are going to become CA now you
will have to leave the things in CA if you keep the rat,
you will not be able to become CA no one can become CA
This will be damn clear
So if you have habit then leave it
And by doing this you put more stress on mind
If you understand the thing and if you do it logically
Then it is done
It is retained and easy to remember
So there is a loss of doing this
Sir we are not doing this
We understand conceptually
Very good
I am very happy after listening to this
Now watch
I will show you a trading account
From where I started
Now you stop writing
For some time
When I say again then write
From where we started
Sir we started
Cost plus profit is equal to sales
Very good
Then you said instead of cost
COX is better word
You proved
COX plus profit is equal to sales
Then you said
If you want to take profit
Then you write sales minus COX
And now
Sir you said
COX formula is
Opening stock plus purchase
Plus direct expense
Minus Closing stock
I did so many things with you
In sales minus COX
I wrote COX formula
Opening stock plus purchase plus direct expense
Minus closing stock
And I put bracket on it
If This equation
This equation
I give the shape of account
If I
Make it an account in T shape
My dear friends
Then this
Will become your
Trading account
Is it sir?
If I credit sales
Because it is income
Then I will credit it
And debit my COX
Because it is cost
Debit all expenses
And from sales figure
COX figure
Minus Then it will come
What you call gross profit
Gross profit
What you call gross profit
Gross profit
It is this
Sales minus COX
Sales minus
COX is equal to
Gross profit
This is called
Trading account
Sir, I understand what you are saying
But we have not seen COX
Written in trading account
COX is written in detail
Its Full formula is written
Opening stock
Purchases Direct expense
Minus Minus Closing stock
Full formula is written
Sir, there is still a little problem
Minus closing stock is not written
Sir, closing stock is written here
Yes When we make an account in T shape
If debit side
If any figure is coming minus
We do not write it by minusing the debit side
We write it on the credit side
Its effect is the same
This is the role of debit and credit in accounts
If you want to do something minus on the credit side
Write it on the credit side
If you want to do something minus on the credit side
Write it on the debit side
And put two words
Here And put the buy word
Here This is how your
Trading account is made
I hope
Maybe you have seen this way
Trading account for the first time
But Retaining it in the mind
Always Trading account
Trading account
Sales minus Cox
Sales Minus Cox
Is equal to
Gross profit
This portion
Sales minus Cox
Is equal to Gross profit
And in the formula of Cox
Opening stock plus purchase plus direct expense
Minus closing stock
We write it on the other side
Okay Okay sir
That's all right
Now you remove the trading account
This is how I have made it
Remove the trading account
Quickly Quickly This is the thing
This is the thing
Now it seems
We will not have any trouble in this chapter
You will not know these things
How can you handle the pressure of this chapter
Questions That's why we are putting a class
Okay It is proving
Okay I hope everyone has written
Let's go
Three things have been completed
And do you know what your chapter is?
In trading account
The figure of closing stock
This is your chapter
Valuation of inventories
The second name of the stock is
Inventory The goods that are not sold
It is called stock or inventory
This This I have just told you in simple examples
To explain
There are many complications to remove this
We have to understand in this chapter
How to calculate its value
How to calculate
How to calculate the value of
Inventories That is my fourth point
In basic knowledge
That is my fourth point
In basic knowledge
Inventories Closing stock
Are valued at
Cost Cost price
Net realizable
Net realizable value
Which we call NRV
Whichever is lower
Lower
Sir You just showed me the stock
You just showed me the stock
You take the purchase price
And you add freight and all
To remove the stock
Do you know what I remove?
I remove the stock
Butosos Butosos
Butosos Butosos Butosos Butosos Butosos Butosos Butosos
Butosos Butosos Butosos When we get to know the Net
Realizable Value, then we select the lower figure in both
of them.
And then we write in our trading account and in our balance
sheet, in current assets, in the name of the stock.
That is, to extract the stock, we need cost and NRV,
whichever is lower.
Now what is this NRV?
Net Realizable Value
Realize means to sell.
What money will you get when your inventory, your stock, is
sold in the market?
This is futuristic value.
How much money will you get when the goods are sold?
You understand this, but what is this formula?
Cost or Net Realizable Value, whichever is lower.
What the hell is this formula?
And how did it become?
I have another example for this.
Sir, we make a mistake by asking you questions.
As soon as we ask you a question, you say, take, write an
example.
Now write, no problem, write.
Things are going to end.
At most, there is a class of 15 minutes left.
It's going to end.
Write a little.
Example Sir, change a little.
Bring a little creativity.
Take this.
This person is Kittu.
This person is Bittu.
Kittu and Bittu.
Kittu also has a shoe shop.
Bittu also has a shoe shop.
There is a showroom for shoes.
The word shop doesn't look good, sir.
Talk big in front of us.
We are chartered accountants.
We will handle goods worth lakhs of crores.
What shop have you set up?
There is a showroom.
Is the showroom okay now?
Yes, sir, it's okay now.
There is a showroom for shoes.
Should I draw you shoes and show you?
Just give me.
I will try in 30 seconds.
To draw shoes.
See, brother, if it works, it's okay.
If it doesn't work, forgive me.
I am trying my best.
By the way, I didn't think that it will be able to be done.
Right.
And if you feel a little, then it has become a shoe type.
Okay.
I started with two and made a shoe.
Sir, you are an artist.
So there is a shoe shop, brother.
Shoes of shoes.
Kittu purchased 200 shoes at the rate 800 and he put a sale
of 150 shoes at the rate 1500.
Sir, Kittu is eating a good margin.
Now what's your problem if the next person is eating and
earning?
You quietly tell me his stock.
Sir, 200 purchases minus 150 sales were left in the stock.
Only and only 50 shoes were left.
Okay.
Bittu's shop was also in the neighborhood.
Bittu said, I am not less than anyone.
I also bought 200 shoes at 800.
Here, I also bought from where he bought.
I also have no shortage of customers.
I also sold 150 shoes for 1500.
And I also have 50 shoes left in the stock.
I also have 50 shoes left in the stock.
Now you know what Kittu is saying.
Now you know we have to write this stock.
We know the quantity of stock.
He also has 50 shoes.
But work does not work with quantity.
Work does not work with quantity.
We need value.
We will write credit side value in the trading account.
Okay.
That means the quantity has to be converted into value.
Kittu is saying there are 50 shoes.
I bought one shoe at 800.
50 into 800.
The value of my stock has become 40,000 rupees.
It became 40,000 rupees.
And this brother is saying.
Bittu.
Bittu is saying that I have 50 shoes.
And when customers come to me.
Then I will sell a pair of shoes to each customer for 1500
rupees.
Okay.
50 pair of shoes.
Assume that only shoes do not sell.
I will sell in 1500.
In 1500.
So I will get 75,000 rupees.
So my stock was equal to 75,000 for me.
One person Kittu is saying.
I bought it at 800.
So I will record it at 800.
I will take the value of 40,000.
One person Bittu is lost in dreams.
He is saying I dream like Sheikh Chilli.
When customers come.
I will buy shoes in 1500.
So I will earn 1500 into 50.
I will earn 75,000 rupees.
So my shoes are worth 75,000.
Now, friend, somewhere we feel Bittu is also right.
When the goods will earn you 75.
So its value is 75.
And Kittu is saying.
Look, I bought it at 800.
So the value is 40.
Kittu is also worried.
Bittu is also worried.
What is the right value?
Both are worried.
Both are sweating.
I will sweat from their forehead.
Wait a minute.
Then.
Both are sweating.
What to do?
How to do?
Sir.
Kittu write 40 and Bittu write 75.
What is the problem?
Okay.
There is a direct relation between stock and profit.
I will tell you in a while.
If one person writes value 40.
One person writes value 75.
Both profits will go up and down.
And some tax from one person.
Some tax from one person.
So, friend, one man will say.
I also purchased that much.
Sold that much.
Value is also the same.
You are taking more tax than me.
You are taking less than that.
There will be a big mess.
That's why the value should be the same.
I will tell you in a while.
The fifth point is the same.
Okay.
To remove this confusion.
Accounting Standard 2 came.
Which gave you this rule.
Which is written above.
Which we have written above.
Inventories are valued at cost or net realizable value.
Whichever is lower.
This is given by AS2.
Accounting Standard 2 has given.
Sir, what is this accounting standard?
You are asking what is the accounting standard?
Being a chartered accountant.
Is it your institute?
Our institute is ICAI.
Institute of Chartered Accountants of India.
A board works under it.
Whose name is ASB.
I am telling practical.
This is the truth.
ASB.
Accounting Standard Board.
That.
Where and where.
Inside accounting.
Disputes are coming.
Fights are coming.
Alternative treatments are coming.
Accounting Standard Board's work is.
Accounting should be equal throughout India.
It should be uniform.
Only then profits will come.
Only then accounts of other businesses.
Can be comparable.
Only then we will know.
Where to invest is good.
Only then we will know.
Which business is doing a good job.
Which is doing a bad job.
When financial statements.
Will not be comparable.
Then what will we know?
Nor will there be oil.
Nor will Radha dance.
Then what will we know?
Nothing.
Okay.
It is necessary to have oil.
Okay.
Yes.
So my dear friends.
Accounting Standard Board has seen.
There is a fight here.
One person is saying.
My stock is 40,000.
The other is saying 75,000.
While all their figures are same to same.
So their stock should also be the same.
There should be a way.
This is a dispute.
It is wrong.
There will be a problem.
He made a rule.
Inventories are valued at.
Cost or NRV.
Whichever is lower.
He made this rule.
And this rule.
The chapter in which it was written.
That chapter was named.
AS2 Accounting standard is nothing.
Like chapters.
Accounting standards mean.
Rules made to solve disputes.
In its chapter number 2.
This rule was written.
Cost or NRV.
Whichever is lower.
If Kittu applies this rule.
So what is its cost? 50 stocks.
Sir.
50 x 800 means 40,000.
And net realizable value.
What will he earn by selling?
Sir.
50 x 1500 means 75,000.
What is lower in these?
The lower is 40,000.
So Kittu will write his stock at 40.
And when this rule will apply Bittu.
So Bittu will say.
My cost is also 40,000.
And I also keep NRV 75,000.
I am also saying that I will sell.
Will earn 75.
What does NRV mean?
What will you earn by selling in the future?
According to this.
My lower is also 40,000.
So Bittu will also have to record at 40,000.
That is, Bittu was refused.
Bittu was told.
Don't take this at 1500.
Take it at lower.
Now some people may feel here.
Sir.
You say this directly.
That you don't have to take it on NRV.
You have to take it on cost.
Why are you saying lower lower?
In the case of Kittu.
Cost is coming out 40,000.
Cost is coming in the answer.
And in the case of Bittu.
The answer is also coming in the cost.
40,000.
So say the cost directly.
It is not like that.
Cost and NRV.
Whichever is lower.
This is the whole formula.
Do you know why?
Write the second example.
Continue in this.
Take this.
Here is Kittu.
Here is Bittu.
Kittu purchased 200 shoes.
At the rate 800.
Exactly same to same figures.
He sold 150 shoes.
At the rate 1500.
And he has 50 shoes left in the stock.
Same to same work.
Bittu's here.
200.
At the rate 800.
Sale.
150.
At the rate 1500.
And in the stock.
50 shoes.
As an extra information.
I will tell you.
The goods that were sold.
That was sold at 1500.
But the remaining goods.
Suddenly in the market.
Its demand has decreased.
And now such hope is being shown.
That these remaining shoes.
They will sell for only 600 rupees.
Their net realizable value.
Only 600 rupees left.
It happens in the market.
Things become outdated.
So this is only 600 rupees left.
Now the rule will be applied.
So what will be the cost? 50 into 800 means 40,000.
And how much will be the NRV?
50 into 600 means 30,000.
Now which is lower?
Now it is 30,000.
So now the cost is lost.
You were saying to take the cost.
In this case, the cost will be lost.
Because NRV is lower.
So we have to apply the formula.
We have to apply the formula.
Cost and NRV.
Whichever is lower.
Sir.
Describe this formula.
It's been a long time.
Tell us its logic.
What does this formula want to say?
How is this formula made?
The basis of this formula is.
My dear friends.
Prudence concept.
Have you heard of prudence concept?
Yes sir. I remember.
You taught in the chapter of concept.
We did not do revision.
Please tell us once.
You do not do revision.
Then you ask me.
I said.
Prudence says.
Record expected losses.
Do not record expected incomes.
Sir. What is this?
You tell me one thing.
Should we take a decision on the strength of our fate?
Or should we do our karma?
Sir. You are talking big.
You are talking big.
We should take a decision on the strength of karma.
We should believe.
In the future.
Our fate will be good.
And everything will be good with us.
Or we should believe.
If we do not do karma.
Our fate will be bad.
It will be bad with us.
If we do not do karma.
It will be bad with us.
This is what prudence says.
Prudence says.
If we do not do karma.
It will be bad with us.
you are doing, they will be yours that's why record them
today expected means you have a guess that this nrv which
is 600 then we are going to have a loss this is a guess,
the goods are not yet sold, it is a guess only my dear
friends guess is saying that the goods purchased for 800
will be sold for only 600 so according to this rule, we
recorded it at 600, the lower is coming out at 30,000
because prudence says consider your fate bad your fate will
not support what you are hoping for you will
be able to avoid it you will have a loss expected to sell
goods for 800 in 600 it will be sold in 600 don't wait for
the future record it at 600 today bring the goods of 800
down today bring it to 600, record your loss record it
writing the goods of 800 at 600 means we have booked a loss
of 200 this is what prudence says
and on the other angle it says that the income that you
have a guess you cannot record that income because this is
a dream you are dreaming that we will sell the goods at
1500 then we will earn so much money who saw the future
that's why you cannot record at 1500 that's why in the
first case
Bittu lost because Bittu was dreaming and in the second
case we recorded at 30,000 because the NRV is lower we have
to record the expected losses because of this rule we
follow prudence cost, price and net realizable whichever is
lower and prudence is an important concept it is necessary
to follow otherwise accounting is not considered right if
prudence is not followed as soon as we put this rule
prudence is followed in the first case we took the cost
ignored the dreams because prudence says
record the expected income don't dream assume that you will
have bad luck then only you will do good and in the second
example prudence said record the expected losses we
recorded at 600 prudence said assume that you will have bad
luck both the things of prudence are proved by this rule
that's why this rule is applied cost and NRV whichever is
lower my dear friends ok sir now comes our last topic what
is that last topic sir closing stock and profits have
direct relation with each other direct
with each other sir why are you saying direct like in the
movie Garb
Salman Khan says how will you like to take a pill with
direct or soda
I remembered the same scene that's why I am saying direct
closing stock and profits have direct relation with each
other what does it mean sir tell us the meaning you have
made a trading account some time back make it again write
here to opening stock to purchase to direct expenses buy
sales buy closing stock and write even if I am straight do
you remember sales-cox-profit yes sir to gross profit sir
why do you say gross profit
I wanted to ask you there is no work in your chapter that's
why I am not telling you difference between gross profit
and net profit gross profit is because we are talking about
goods there are expenses other than goods like electricity,
rent, interest those expenses come down there is no need of
those in this chapter that's why I am not telling you gross
means raw profit you have to minus indirect expenses in P&L
account then net profit comes ok you tell me the meaning of
your line take this
our opening stock is 10,000 we purchased for 90,000 and our
direct expenses are 20,000 90, 10, 1, 20 our sales are
2,00,000 and our closing stock is 30,000 tell me the
balance tell me the balance this is a left handed game we
will show you calculator 2,00,000 plus 30,000 minus 10 and
90 1,20,000 1,10,000 profit is 1,10,000 total of both sides
is 230 and 230 ok is it sure? yes sir for one minute if I
increase my closing stock from 30 to 40 what will happen if
I increase it from 30 to 40 how much
be the profit on the basis of 40 sir 2,00,000 40,000 minus
10 and 90 1,20,000 sir this is 1,20,000 yes profit is
1,20,000 means as soon as I increased my closing stock from
10,000, my profit also increased from 10,000 sir shall I
reduce it once yes, reduce it fulfill your wish instead of
30, reduce it to 20 so this will be sales 2,00,000 plus
closing stock 20 minus 10,000, 90,000 and 20,000 sir this
is 1,00,000 this time 1,10,000 profit is reduced from
10,000 to 1,00,000 yes, this is what I
written above closing stock and profits have direct
relation with each other if closing stock increases then
profit will also increase the more you increase your
closing stock the more profit will increase and if you
reduce the amount of closing stock the more you reduce the
more your profit gross profit will also decrease
do you know why I told you this chapter is very important
even after becoming CA now we are talking about inside
don't show too much video to anyone otherwise the inside
will come out when you will come to practice as CA client
will come to you client will say first you will be sitting
in the office you will wear glasses like this in lifestyle
client will say how are you how are you it's been a long
time client will say our profit is increasing we are
getting more tax
CA sir, do something you are CA we will give you fees and
if you don't save tax then who will save us you said this
now I will tell you how much stock is coming which
department is coming how much stock you had in today's date
that is in your warehouse shift table we will adjust it
I am CA
I have to audit
I have to sign your report
I will reduce your stock profit will also decrease tax will
also decrease but give me some money then I will sign on
stock then I will sign on audit that's why I told you it
will be useful for you practically closing stock is the
only item which is first thought about adjusting if you
have to fluctuate profits and you get profit here from
start to end you get profit client gives you profit
I will keep this much profit
I can give this much tax you see how you have to do you go
straight while studying from start to end you get profit
practically opposite first you get profit then you have to
adjust
you