Showing the contingent liabilities in notes to accounts makes the users of accounting information aware of such liabilities which may occur in future. Such information helps them in making various decisions.

Machinery imported for sale in India will be treated as goods. Machinery purchased for production will be treated as fixed assets.

The balance sheet of business concern can be presented in the following two forms.
a) Horizontal Form
b) Vertical Form

According to J.R. Batliboi, "A Balance Sheet is a statement prepared with a view to measure the exact financial position of a business on a certain fixed date."

According to Proof Carter, "A Profit and loss account is an account into which all gains and losses are collected, in order to ascertain the excess of gains over the losses or vice-versa".

Fixed assets are those assets which are acquired or constructed for continued use in the business and last for many years such as land and building, plant and machinery, motor vehicles, furniture, etc.

Wasting assets are the assets which get exhausted gradually in the process of excavation.

(i) Trading refers to buying and selling of goods with the intention of making profit.
(ii) The trading accounts a nominal account which shows the result of buying and selling of goods for an accounting period.
(iii) Trading Account is prepared to find out the difference between the revenue from sales and cost of goods sold.
(iv) Cost of goods sold refers to directly related cost.