Page 350 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Unit 14: Preparation of Final Accounts

Self Assessment Notes

State whether the following statements are true or false:
7. Proposed dividend is shown under the heading of current liabilities.
8. Unpaid dividend is shown under the heading of current liabilities.

9. Advance payment of income tax is shown under the heading of Advance in the assets side
of the balance sheet.
10. Goodwill appears under the heading of fixed assets of the balance sheet of a company.

Illustration 1:
Mention the major heads in the required serial order under which various assets of a company
are to be presented as per the requirements of the Companies Act.

Solution:
Various assets to be shown under the following heads.
1. Fixed Assets
2. Investments
3. Current Assets, Loans and Advances

(a) Current Assets
(b) Loans and Advances
4. Miscellaneous Expenditure (to the extent not written off)

5. Profit and Loss Account- Dr. Balance
Illustration 2:
Under what headings will you show the following items in the Balance Sheet of the Company.
1. Goodwill
2. Unclaimed Dividends

3. Provision for Tax
4. Securities Premium A/c.
5. Loose Tools

Solution:
Items Heading Sub-heading (if any)
Goodwill Fixed Assets –
Unclaimed Dividends Current Liabilities and Provisions Current Liabilities
Provision for tax Current Liabilities and Provisions Provisions
Securities Premium A/c Reserve and Surplus –
Loose Tools Current Assets, Loans and Advances Current Assets

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