hello hello hello hello hello hello hello friends
so let's go further and today is the last clip of
accounting equation we will complete the discussion we will
talk a lot we will make balance sheets so without any delay
now we are going to start some new points will also come in
front of you write some speed keep it fast in today's clip
write example please write down example
Bs means balance sheet, number one.
Raghu started business with cash rupees 1,50,000, 1,50,000
rupees, rupees 1,50,000, 1,50,000 rupees.
Number two, bought goods for cash rupees 80,000 and on
credit rupees 40,000.
Number three, goods costing 75,000, goods costing 75,000
were sold at a profit of 33 right 1 by 3 percent, at a
profit of 33 right 1 by 3 percent, half the payment is
received in cash, half the payment is received in cash.
Fourth point, goods costing 10,000, sold for rupees 12,000
on credit, sold for rupees 12,000 on credit, paid for rent
rupees 2,000 and salaries rupees 4,000, paid for rent
rupees 2,000 and salaries 4,000, goods costing rupees
20,000, sold in rupees 18,500 for cash, for
cash, everybody write it down.
I will create a new asset which will be called debtors
I will add 50,000 in cash
It is an asset and another asset of 50,000 1 lakh from
debtors and 75,000 from goods and stock
and this profit of 25,000 will be added to my capital
Yes sir, no issues
Let's move ahead and see the effect
What will happen on third point?
Goods will be reduced to 75,000
Cash will be added to 50,000
New assets are being born in the name of debtors
So, 50,000 will be added to debtors
and this profit of 25,000 will be added to my capital and
this profit of 25,000 will be added to my capital
So, what will be the equation?
Let me draw a straight line
What will be the equation?
After third point, equation 70 and 50
Cash will be 1,20,000
120 minus 75
I will have goods of 45,000
plus debtors of 50,000
is equal to
Creditors are still alive plus my capital
75,000
So, total of right hand side is 40,000
and 75,000 is equal to
2,15,000
and this side is 120,000
plus 45,000 plus 50,000
is equal to 2,15,000
Congratulations, friends
Total of both sides is 2,15,000
and your equation is tallied
Equation is tallied
Next point
Goods costing 10,000 sold for 12,000 on credit
Very carefully
Goods of 10,000 sold
Fourth point will be
Goods of 10,000 will be minus
Sold for 12,000
Debtors will increase by 12,000
Whenever you sell a loan, debtors will increase
and this profit of 2,000 will be added to your capital
Do not do anything for liability
This profit of 2,000 will be added to your capital
Do not do anything for liability
There is no effect on cash
So, equation
Sir, how did this profit of 2,000 happen?
Friends, if you sell goods of 10,000 for 12,000
then there is no profit
Sir, we did not get it, but we got that money
I explained the same thing to you in the previous clip
Whether you get it or not, it does not matter in accounts
You sold goods of 10,000 for 12,000
and the profit of 2,000 is done
So, the equation will be like this
Cash will be 120
Goods will be 45,000 minus 10,000
35,000
plus debtors will be 50,000 and 12,000 60,000
is equal to creditors as it is
40,000
plus capital 175 and 2,000
1,77,000
So, the total on the right hand side is
177,000 plus 40,000
2,17,000
and the total on the left hand side is
120,000, 35,000 and 62,000
2,17,000
Equation is tallied
Let's move to the next point
You paid rent and salary
2,000 and 4,000 is 6,000
5th point
Cash will be reduced by 6,000
No effect on this, no effect on this
And my account will also be reduced by 6,000
Because rent and salary is expense
What will expense do?
It will reduce my account
So, capital will be reduced from there
And then what will be the equation?
Then the equation will be like this
120 minus 6
My cash will be 1,14,000
This is still 35,000
Goods
still 62,000
Liability still 40,000
And
177,000 minus 6,000
Capital is 1,71,000
So, the total on the right hand side is
40,000 plus 171,000
2,11,000
And the total on the left hand side is
1,14,000 plus 35,000 plus 62,000
2,11,000
Both sides are tallied
Let's move to the next point
Goods costing 20,000
Sold in 18,500 for cash
For the first time, you are getting to see such a point
For the first time
Goods costing 20,000
You sold it for cash
But you got only 18,500
Friends, try to understand
You went to buy goods
You paid 20,000
And you got only 18,500
Is it a profit or loss this time?
Sir, this time it is a loss of 1,500
This time it is a loss of 1,500
So, what will happen?
Look at this
6th point
Goods will be sold for 20,000
So, goods will be reduced to 20,000
And cash will be sold for only 18,500
So, it will be plus in cash
Only 18,500
And if you sell goods for 20,000 in 18,500
The loss of 1,500
Will be reduced by your capital
The loss of 1,500
Will be reduced by your capital
So, what will be the equation after this?
Cash
132,500
Plus stock
15,000 plus debtor
62,000
Is equal to liabilities
40,000 plus capital
169,500
So, total of right hand side
40,000 plus 169,500
2,09,500
And total of left hand side
132,500 plus 15,000 plus 62,000
Same to same
2,09,500
We have done all the points
Equation is still tally
No doubt, no problem, no issue at all
Let's go
Let's revise quickly
As soon as possible
Raghu started business with cash 1,50,000
1,50,000 will increase in cash
And 1,50,000 will increase in capital
Tally on both sides
Goods will be sold for 80,000
New asset will come
Asset side will be less than 80,000
Asset side will be more than 80,000
Equation will remain the same
Credit which bought for 40,000
Will increase your goods by 40,000
And on other side, will increase liabilities
Creators will increase by 40,000
Equation is tally
Goods costing 75,000
Were sold at a profit of 1 by 3
75,000 goods
1 by 3 means 25,000
Were sold for 1,00,000
In which 50,000 cash was found
And 50,000 is still on loan
50,000 cash was found
And 50,000 is still on loan
So, the effect will be
Goods will be less
75,000 goods will be sold
And if 50,000 cash is found
50,000 will be added in cash
And if 50,000 debtors are there
50,000 debtors will be created
So, what is the effect on asset side
50,000 came in cash
And 50,000 debtors came
Asset side became 1,00,000 plus
But asset side became 75,000 minus
Asset side became 25,000 plus
And on the other side
The profit of 25,000 will be plus in capital
It will be plus in capital
You see, I will try to explain you in a more beautiful way
So that you will remember it for a long time
See this
The asset of this 75,000 gave its sacrifice
And gave birth to the new asset of 1,00,000
The goods of this 75,000 gave their sacrifice
And gave birth to new assets of 50,000
And gave birth to new assets of 1,00,000
So, if an asset of 75,000
Gives its sacrifice
And generates an asset of 1,00,000
Then this is a profit of 25,000
This is a profit of 25,000
Yes, and the same profit of 25,000
Is attached to your capital on the other side
The same profit of 25,000
Is attached to your capital on the other side
This was the point
Goods costing 10,000
Sold for 12,000 rupees
On credit
A product of 10,000 was lost from us
Whose cost price was 10,000
So goods will be reduced by 10,000
In return, debtors of 12,000 are being born
Sometimes the weather is bad
Sometimes it is cold, sometimes it is hot
I have switched off the AC
I am very cold
So goods of 10,000 will be reduced
And debtors of 12,000 will be generated
And the profit of 2,000
Is the same here
As I told you a while ago
The goods of 10,000
Generated a debtor of 12,000
So the asset of 10,000
Gets a profit of 12,000
So the profit of 2,000
Is added to the capital on the other side
Rent is 2,000
Salary is 4,000
Total expense is 6,000
What did you do? You reduced it from cash
And on the other side, expense will always reduce your
capital
Goods costing 20,000
Sold in 18,500 for cash
For the first time, you have incurred a loss
Assets of 20,000
Gave their sacrifice
Assets of 20,000
Gave their sacrifice
And generated a new asset of only 18,500
One asset sacrificed its 20,000
And in return, it was able to bring only the asset of 18,500
This is the loss
Loss of 1,500 rupees
I will reduce this from my capital
And finally, my equation was made
Cash 132,500
Stock 15, debtor 62
Liabilities 40,000
And capital 169,500
This was the question
Now, a lot of things have been discussed
And a lot of points have been discussed
And the effect on the accounting equation
How does it happen?
We have seen everything
Now we are going to discuss about balance sheet.
How to make a balance sheet?
What is a balance sheet?
Now we are going to discuss about balance sheet.
Let's start.
You didn't even get to know.
Whatever you have discussed in this clip and previous
clips, you were learning balance sheet.
And you didn't even get to know that you have learned
balance sheet.
Yes sir, this is the fun part.
When did you learn balance sheet?
You didn't even get to know.
This is the equation.
Balance sheet is called.
How? When you do all the work, then you don't need to
understand balance sheet separately.
I will tell you how.
This is the equation of balance sheet.
What do we do?
We have written it like this.
Assets is equal to liabilities plus capital.
What do we do?
We write assets on this side.
And we write liabilities and capital on this side.
And we will make this whole thing like this.
We will give a heading above this, which is called balance
sheet.
It means we are making the horizontal thing vertical.
And by changing the name of the accounting equation, we are
keeping the balance sheet.
It is the same thing and nothing else.
Same to same.
Just the presentation is changing a little.
The way of presenting is changing.
It is the same thing.
You eat chhole kulche for 20 rupees or 200 rupees.
It is the same chhole kulche, just the way of presenting
changes.
But it is a big thing.
You take classes in 2000 or you take classes in 4000.
What will be the difference?
The way of presenting will change.
Now what do you have to do?
You have to write the last equation.
What were the assets I had in the last?
Cash, stock and debtors.
They have to be written on the asset side.
Cash, stock, debtors.
Liabilities have to be written on the left side.
Creditors and capital.
Creditors and capital balance.
How much is the amount?
Cash was 132,500.
Stock 15,000.
Debtors 62,000.
Creditors 40,000.
Capital 169,500.
And the total of both sides.
209,500.
This is the total of both sides.
This is the balance sheet.
Is the balance sheet a big problem?
There is no need to see the balance sheet separately.
Understand the accounting equation.
And this is also a telly on both sides.
It will always be a telly.
Rule, general rule.
Infallible rule of accounts.
Both sides of the balance sheet.
Will always remain tellied.
Both sides of the balance sheet.
Will always remain tellied.
Both sides of the balance sheet.
Will always remain tellied.
Why? The balance sheet is made from the equation.
Which has a dual effect on both sides.
On assets, liabilities and capital.
The equation from which the balance sheet is made.
When it is always tellied on both sides.
Then the balance sheet will always be tellied on both sides.
Sir, we have seen one thing.
I said which one?
Sir, the asset side you have written.
There only assets are written in the balance sheet.
But sir, liability plus capital.
We have not seen such a heading in any balance sheet.
We have seen the heading in the balance sheet.
Only liabilities word is written in it.
No such word is written anywhere.
Liabilities plus capital.
I said you are absolutely right.
In the balance sheet, on the left hand side.
Liabilities word is written.
And on the right hand side.
Assets word is written.
I am not denying you.
But friends.
Both things will be written here.
Liabilities as well as creditors.
And the balance of capital.
But sir, why do we remove the capital word from above?
Friends.
This happens in the case of individual and partnership
businesses.
These people say that.
We are making the balance sheet of the business.
This balance sheet is not being made by the owner.
We are making this balance sheet of the business.
This is what we say.
And the money of the owner on the business.
The capital that the owner has invested in the business.
That is capital.
That is also a loan for the business.
That is also a liability for the business.
That is also a loan liability for the business.
So in the heading of liability.
If you write the capital, then it will work.
Because capital for business.
Money of the owners.
The capital of the owners is also a liability.
But still sir, still.
The liability of outsiders.
And the liability of the owner inside.
Should look different.
Still.
Yes friends.
That is why it is called capital.
It is removed from this name.
That this is the money of the owner.
And anyway.
This happens in the case of individual and partnership
firms.
Which is our company form of business.
A law is applied on companies.
Companies Act 2013.
He told a different format of his balance sheet.
And in that he said.
That here we will not write the liability word.
We will write the whole.
Equity and liabilities.
Equity means the other name of capital.
So in the case of companies.
The word is written here.
Equity and liabilities.
In the case of individual and partnership firms.
Here only.
Liabilities word will be written.
Anyway, no problem.
We should understand the concept.
What is what and how.
We don't have to get into any trouble.
What to write and what not.
We will keep writing as per the tradition.
The main thing is.
Left hand side is equal to our right hand side.
This is the most important thing.
The left hand side is equal to our right hand side.
Yes sir.
Okay.
Friends, in the same way.
All the questions I have asked you previously.
All those balance sheets will be made.
Whatever example we do.
On the accounting equation.
All those balance sheets will be made in the same way.
Write balance sheet above.
Left side liability.
Right side asset.
And write capital on the left side liability.
And write all the assets on the right hand side.
After doing all the transactions.
The last equation that comes to us.
We put it in the balance sheet.
Because.
The balance sheet is made on a particular date.
Friends.
We have.
The cycle of the account is something like this.
Journal entry.
Then ledger.
Then trial balance.
And then financial statements.
Journal.
Ledger.
Trial balance.
Financial statements.
It starts with the journal.
And on the financial statement.
Accounting comes and ends.
In financial statements.
We have to make two statements.
One is the balance sheet.
And one is the P&L account.
One balance sheet.
And one P&L account.
The balance sheet that is made.
That is.
As at a particular date.
The balance sheet that is made.
That is made as at a particular date.
And what is that particular date?
That is the last date of the year.
Like 31st March.
It is told by the account.
From 1st April to 31st March.
We follow the year.
So the balance sheet.
Tells the condition of a particular day.
After doing all the transactions.
On a particular day.
My cash was this much.
Stock this much.
Debtors this much.
Creditors this much.
And capital this much.
This will change again.
The balance sheet is not such a final thing.
As soon as there will be one more transaction.
All my figures will change.
Assets, liabilities, capital.
It will affect my equation again.
And my balance sheet will change again.
So the balance sheet.
Tells the condition of a moment.
It tells the condition of a moment.
Of a day.
A moment means a day.
Daily.
We don't make a balance sheet.
We keep working the whole year.
Keep doing transactions.
And on the last 31st March.
The effect of all transactions.
Which is final.
We put it in the balance sheet.
And from the next day.
We start again.
For transactions.
So the balance sheet.
Is made only one day.
On 31st March.
And P&L.
Is made.
For the year.
In P&L.
The condition of the whole year.
P&L is such an account.
In which we write.
All the income on the right hand side.
And on the left hand side.
We write all the expenses.
And then from the income.
We minus the expenses.
And try to get our profit.
That how much is our profit.
P&L is the name of such an account.
So in P&L.
We write the income of the whole year.
All the income during the year.
We take the expenses of the whole year.
All the expenses during the year.
And then from the total income.
Minus the total expenses.
And get the profit.
So P&L tells the condition of the whole year.
Balance sheet only tells the condition of a date.
You can short it like this also.
Balance sheet is a photo and P&L is a video
Photo captures a particular moment and tells what was there
in that particular moment
Whereas in video you can see everything from start to end
Who came from where, where did he go, everything can be seen
Balance sheet is a photo and P&L is a video
So under balance sheet you will always see this word as at
and under P&L you will always see this word for the year
Pick any company's balance sheet and see
In any book of 11-12, under balance sheet you will see as
at and under P&L you will see for the year word
People become professional and they don't know this
difference
What I have told you today, keep this thing in mind all
your life
This is very important and important thing
Now one more thing
Sir, you also said a while ago that balance sheet only
tells the condition of a particular date
One day becomes the last day
Sir, we have seen big companies like Reliance their
quarterly balance sheet is made every three months
Some companies make it for 6 months
Some companies make it for 18 months
So see friends, the principles of accounting
According to them, you make the balance sheet after every
transaction
They will not say no
You made the first equation, make the balance sheet after
this
Asset side cash will come 1.5 lakhs
Left side capital will come 1.5 lakhs
Second transaction, make the balance sheet after this
Make it after the third transaction
Even after every transaction, balance sheet can be made
If the thing is like this
If the thing is to make balance sheet
Then I am telling you, balance sheet can be made after
every transaction
But there is a general tradition
That if you make balance sheet after every transaction
Then business is done, then accounting is done
Then balance sheet will be made on daily basis
That's why one year period 12 months period is considered
sufficient
And considered genuine
Keep doing transactions for 12 months
And after that, the final equation that came after 12 months
Put that in your balance sheet
And one particular date, last day of the year
Balance sheet will tell you the situation
That what is going on in the business
Sorry friends
Let's go
So friends, let's hope that you have understood
Accounting equation
That how the accounting equation is
You must have understood that
Balance sheet is made from accounting equation
Balance sheet, now you can make it directly
Thinking about the equation in your mind
On which equation, on which asset
On which liability, on which capital
And you can directly put those values in the balance sheet
Do practice that at home
So see you in the next clip