Page 38 - IC26 LIFE INSURANCE FINANCE

If any balance remains in the ‘Sales Tax Payable' A/c till the year ending, it should be shown on the

liabilities side of Balance Sheet'

(xi) Commission based on profit: Sometimes commission is payable to manager based on net profit

(a) Commission on net profit before charging such commission =

Profit before commission xRate of Commission
100

(b) Commission on net profit after charging such commission =

Profit before commission x Rate of Commission

100+ Rate of Commission

4. Balance Sheet : It may be defined as "a statement which sets out the assets and liabilities of a
firm or an institution as at a certain date.

Balance Sheet as on...

Liabilities Amount Assets Amount
Capital A/c: Fixed assets
Balance Tangible
Add: Net Profit Land & Building
Less: Drawings Plant & Machinery
Less: Net Loss (if any) Furniture & Fixture
Long term loans Motor vehicles
Term loans Intangibles
Other loans Goodwill
Short term loans Patent Rights
Cash Credit Designs and Brand
Overdrafts names
Current liabilities Deferred
Sundry Creditors Advertisement
Bills Payable Investments
Outstanding Long term
Expenses Investments
Advances Taken Short term
Provisions and Investments
Reserves Current assets:
Provision for Bad Stock
debts Debtors
Provision for BillsKeclivable
Taxation Prepaid
General reserve expenses/Advances
Capital reserve Cash at Bank
Cash in hand

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