If Closing Stock appears inside the Trial Balance, it means it has already been adjusted against Purchases (Cost of Goods Sold). Therefore, it is not shown in the Trading Account but only appears as an Asset in the Balance Sheet.

Adjustments have a dual effect. 1. Create the expense (Debit P&L). 2. Reduce the asset value (Deduct from Sundry Debtors in Balance Sheet).

Items inside the Trial Balance have already been journalized. Wages Outstanding in TB means the entry (Wages A/c Dr to Wages Outstanding A/c) is already passed. So, it only needs to go to the Balance Sheet as a Liability.

Marshalling is the arrangement of assets and liabilities either in the order of Liquidity (most liquid first) or Permanence (most permanent first).

Accrued Income is income earned but not yet received. It is a receivable, hence a Current Asset.

Income Tax of the proprietor is a personal expense, not a business expense. Hence, it is treated as Drawings and deducted from Capital in the Balance Sheet.

This is distinct from companies. For partnerships, tax is a personal liability of the firm/partners, often treated as Drawings in accounting questions, or appropriation. However, technically, tax on firm's profit is an appropriation, but tax paid on behalf of partners is Drawings.

Interest on Capital is an appropriation of profit among partners, not a charge against profit. Hence, it appears in the P&L Appropriation A/c, not the main P&L A/c.

A Provision (e.g., for Tax) must be made even if there is a loss. A Reserve (e.g., General Reserve) is created only if there is profit.

Assets like a building under construction or machinery being installed are shown as CWIP in the Balance Sheet until they are capitalized (ready for use). Depreciation is NOT charged on CWIP.

Once written off, the debtor's account is closed. Any subsequent recovery is a gain/income and is credited to "Bad Debts Recovered A/c", which goes to the Credit side of P&L.

These are potential obligations that may arise depending on the outcome of a future event (e.g., a court case). They are disclosed in the footnotes.

Discount is offered only to good debtors. Therefore, we first remove bad debts and doubtful debts (Provision) before calculating the provision for discount.