If GP is 1/3 of cost, it is 1/4 of sales. GP = 1/4 * 1,20,000 = 30,000. Cost of Goods Sold (COGS) = Sales - GP = 90,000. COGS = Opening Stock + Purchases - Closing Stock. 90,000 = Opening Stock + 98,000 - 18,000. 90,000 = Opening Stock + 80,000. Opening Stock = 10,000.

A credit balance in the Profit and Loss Account represents net profit earned by the business. Since this profit belongs to the owners, it is added to the equity section on the liability side of the balance sheet, as it represents an obligation of the business to its owners.

The correct classification is: Provision for taxation is a Provision (a-4), Livestock is a Fixed Asset (b-3), Sundry debtors are Current Assets (c-1), and Interest accrued on unsecured loans is categorized under Unsecured Loans (d-2). This classification is essential for preparing a properly structured balance sheet according to standard accounting practices.

A balance sheet reports a company's financial position. Tangible assets (like machinery or land) are clearly listed. Fictitious assets (such as preliminary expenses or discount on issue of shares) are also technically recorded on the asset side of the balance sheet until they are written off against profits, despite having no realizable value.

When Closing Stock appears inside the Trial Balance, it indicates that the adjustment has already been made to the cost of goods sold. Therefore, it is treated as an asset and recorded directly in the Balance Sheet, rather than being adjusted in the Trading Account.

The balance sheet, also known as the statement of financial position, reports the assets, liabilities, and equity of a business at a specific point in time. Unlike the income statement, which covers a period, the balance sheet shows the financial health and capital structure of the entity as of a particular date, helping stakeholders assess solvency and liquidity.

Long-term liabilities are financial obligations that are not expected to be settled within the next twelve months or the current operating cycle of the business. These typically include items like long-term bank loans, bonds payable, and mortgages. They are distinct from current liabilities, which are due within the short term. Managing these obligations is crucial for assessing the long-term solvency and financial health of an organization.

A contingent liability is a potential obligation that depends on the occurrence of a future event. Liability on bills discounted is a classic example; the company is only liable if the original drawer fails to pay the bill upon maturity. Until that event occurs, it remains a contingent liability rather than a certain debt.

Financial accounting is primarily concerned with the preparation of financial statements that reflect the economic reality of an entity. Its main objective is to provide external and internal stakeholders with a clear view of the firm's profitability (via the Income Statement) and its overall financial position (via the Balance Sheet). While cost accounting focuses on internal efficiency, financial accounting serves the broader purpose of reporting historical financial performance.

Goodwill is classified as an intangible asset because it lacks physical substance. It arises during a business acquisition when the purchase price exceeds the fair market value of the identifiable net assets acquired. It represents the premium paid for intangible benefits such as brand reputation, customer loyalty, and intellectual property, which are expected to provide future economic benefits to the acquiring firm.