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Unit 13: Final Accounts for Companies

Notes

Notes

1. Details under each of the above items shall be given in separate Schedule. The
Schedules shall incorporate all the information required to be given under Part IA
of the Schedule VI read with Notes containing General Instructions for preparation
of Balance Sheet.

2. The Schedules referred to above, according polices and explanatory notes that may
be attached shall form an integral part of the balance sheet.

3. The figures in the balance sheet may be rounded to the nearest “000” or “00” as may
be convenient or may be expressed in terms of decimals of thousands.
4. A footnote to the balance sheet may be added to show separately contingent liabilities.

By notification No. GSR 388(E) dated May 15, 1995; the Central Government has
inserted Part IV in the Schedule VI to the Act.

Self Assessment

Fill in the blanks:

1. The Board of Directors is required to present its Profit and Loss Account and Balance Sheet
in every ………………… of the company.

2. The first Profit and Loss Account can be prepared from the date of incorporation upto a
period which initially cannot be more than ………………… after closing the accounts.

3. Preparation of balance sheet in the prescribed format is required u/s ................... of the
Companies Act.
4. If the rate of proposed divided does not exceed ................... no transfer of profit to reserve
will be compulsory.
5. Capital Redemption Reserve and ................... can be utilized only for the issue of fully paid
bonus shares and not meeting the partly paid equity shares into ....................

13.3 Explanation of Major Items of Liabilities Side of the Balance Sheet

1. Share Capital: Under the heading of Shares Capital, Authorised, Issued, Subscribed, Called
up and Paid up Capital are disclosed. If the company has issued the preference shares,
Preference Capital is also showed separately under this heading. These capital are given
stating the number and nominal value of the shares. Shares allotted for consideration other
than cash, shares issued as bonus shares and calls in advance are also shown separately. Calls
in arrear (the unpaid calls) are disclosed as deduction from the amount of called up capital.
2. Reserve & Surplus: Under this heading, the following items are shown separately:

(i) Capital Reserve
(ii) Capital Redemption Reserve
(iii) Securities Premium
(iv) Other Reserve

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