06 August 2010
Dear Experts, Is it possible to have P&L A/c (for the current year) in the trial balance itself for the year ended XXXX. How i have to proceed in such a case? With regards, Rajesh
06 August 2010
its not possible to have p&L account balance for current year in the current trial balance in view of the fact that current profit/loss is net outcome of all incomes/expenses and hence as long as income/expenses items are forming part of Trial, you cant derive current profit. This is why only opening balance of p&l is reflected in Trial, which is result of past years/periods.
Whilst I admit that Mr. Vinod Arora is fully correct from a practical point of view, it is possible for the examiner to pose a question with TB showing current year P&L amount and ask the candidates to prepare a Balance Sheet (BS).
It is important to note that such a question can only ask you to do a BS as the P&L is already done and the figure is reflected in the TB. All you should do is to simply proceed to do a BS.
Examiner can also make the question further tricky (rare), by also asking the candidates to pass make some provisions which was omitted whilst doing the original P&L. In such case the candidates will have to do a "bridge P&L" from the current P&L to new P&L by making provisions.
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