Final account preparation involves preparing a set of accounts and statements at the end of an accounting year. Depreciation: Every fixed asset must be depreciated; and for the purpose of depreciation, the life of each asset is to be taken as stated in the table given in the Seventh Schedule. (iv) Compulsory investments made on account of contingencies reserves. At the same time, they should have taken previous permission from the Central Government for this purpose. This document is highly rated by B Com students and has been viewed 3234 times. Building @ 2% p.a., Plant and Machinery @ 10% p.a., Furniture @ 10% p.a. (iii) The amounts of any loans borrowed from organisations or institutions approved by the State Government. According to paragraphs III, IV and V of the Sixth Schedule, every electricity company is required to maintain Contingencies Reserve. 35:00. Browse more Topics under Final Accounts 45,000 and Salaries and Wages Rs. Certain sections of this publication are designed to help you understand and address potential challenges in accounting and reporting related to topics on which the FASB has recently issued (1) proposed guidance or (2) final … • Prepared by a Certified Public Accounting Firm – Compiled Financial Statement – Reviewed Financial Statement ... • Is a “snapshot in time” –presents the financial picture of the Company as of a specific date ... book value of the company to the owners • Consists of: – Capital Stock or Members’ Capital 7. The monetary value associated with an asset acquired is said to be its cost. Every electricity supply company is required to submit to the State Government (or to its nominee which is the State Electricity Board) certain statistical statements in the prescribed form according to Rule 26 of the Indian Electricity Rules, 1956. The cost of service connections must be shown as a fixed asset and the amount so received from the customers for this purpose will be shown in the liabilities side of the Balance Sheet under the head ‘Contributions by customers towards cost of Service Lines’. (a) full in hand at the end of each month of the year of account. Prior to 1948, electricity supply companies charged high rates from the consumers and did not make any reduction on rates. 2. Every businessman enters into business activities to earn profit. Trading Account. Content Filtrations 6. The trading account shows the gross profit or gross loss, net profit or net loss is calculated from profit and loss account and balance sheet is prepared to know the position of assets and liabilities.” – O. P. Gupta. The preparation of final accounts The trading account The trading account is an account in the ledger and is thus a part of the double-entry system. 3,51,450) must be refunded to the company u/s 309 (5A). Managing Director’s commission will be @ 1% on Rs. Failure … Terms of Service 7. Only two methods are recognised here for the amount of depreciation on fixed assets, viz., Compound Interest Method and the Straight Line Method. Balance Sheet. The Electricity Companies may also prepare their accounts as per Schedule VI of the Companies Act, 1956, for the purpose of informing their shareholders. Preparation of Profit and Loss Account of a Company: The following balance appeared in the books of Regent Company Ltd. as on 31st December 1999: From the above balance and the following information, prepare the Company’s Profit and Loss Account for the year ended 31st Dec. 1999: (2) Outstanding Expenses: Manufacturing Expenses Rs. Preparation of Final Accounts of a Company: Calculating the Remuneration Paid to the Directors, Preparation of Profit and Loss Account of a Company, Preparation of Balance Sheet as Required by Part I, Schedule VI of the Companies Act, Preparation of Balance Sheet of a Company as Required under Part IB of Schedule VI of the Companies Act, 1956, Preparation of Final Accounts of a Company. In this you keep track of a company's financial transactions using standard rules, the transactions are recorded, summarized, and presented in a financial report or financial statements such as an income statement or a balance sheet. and Motor Vehicles @ 20% p.a. 2,000 with Perfect Bank Ltd. which is not a Schedule Bank. Give note at the foot of the Balance Sheet as may be found necessary: The following additional information is also provided: (1) Miscellaneous expenses included Rs. electricity and gas used in the manufacturing facilities indirect factory supplies, and much more Because manufacturing overhead is an indirect cost, accountants are faced with the task of assigning or allocating overhead costs to each of the units produced. (4) Schedules need not be given. Image Guidelines 5. 700 for out of pocket expenses paid to the auditors. 1. Thus the final accounts will consist of a profit and loss account and balance sheet. The Double Account System is a method of presenting the annual final accounts/annual financial statements of public utility undertakings, like Railways, Electricity, Gas, Water Supply, Tramways etc. Disclaimer 8. They must comply with the Companies Acts which describe the ‘form and content’ of the financial statements. (7) Bills Receivable for Rs. (2) 2,000 Equity shares are issued for consideration other than cash. Depreciation must be provided on all fixed assets. The Board of Directors of Sen & Co. Ltd. consists of two whole-time Directors and three part-time Directors. 1,50,000 in the loan account with State Financial Corporation is inclusive of Rs. (3) Debtors of Rs. Kauser Wise 334,490 views. Some of the above prescribed forms are presented: It has already been stated earlier that there are some financial provisions contained in the Sixth and Seventh Schedules of the Electricity (Supply) Act. 4,400 (‘000); (iii) Provision to be made for Managing Director’s Commission at 1% of the net profits; Depreciation as per Section 350 of the Companies Act, in Rs. Similarly, when any fixed asset ceases to be available for use through obsolescence, inadequacy, superfluity, or for any other reason, it shall be described in the books as discarded asset and, consequently, no further depreciation is allowed (paragraph VII of the Sixth Schedule). In this article we have compiled top five accounting problems on final accounts of the companies with its relevant solutions. The following adjustments are yet to be made: (i) Investment Allowance Reserve to be created Rs. Plagiarism Prevention 4. A balance sheet reflects the financial position of a business for the specific period … Accounts of Companies 5 company for a period of not less than eight years immediately preceding the relevant financial year. 1 % commission on the balance Sheet IPCC students accounts of General Insurance Companies | accounting problems! Choice Questions ( MCQs ) test for final accounts will consist of trading in goods supplies... 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