The document provides an overview of key financial statements including the balance sheet and profit and loss account. The balance sheet shows a company's financial position on a particular date by outlining assets, liabilities, and equity. The profit and loss account shows operating results for a period by outlining revenues, expenses, and net profit. It summarizes the financial performance of a business over a specific period of time.
1. Balance Sheet & Profit & Loss Account Overview of Financial Statements
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6. Profit & Loss Account: Profit & Loss Account shows the result of operation of the company during a certain period. There are two forms in which a Profit & Loss Account can be prepared: Horizontal Format & Vertical Format Profit & Loss Account Vs Balance Sheet : Profit & Loss Account represents the period of time whereas the Balance Sheet represents a single moment in time. - 5 -
7. Profit & Loss Account Revenue : Cash inflows during the period from rendering of services or other activities. Expenditure: Cash outflows or incurrence of liability during the period from rendering of services or other activities. Includes employee cost, General & administration expenses, Selling & distribution expenses, etc. Net Income = Revenue (Less) Expenses - 6 -
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18. Liabilities: Note: The Authorized Share Capital is shown only as a total amount by way of information & NOT added to the liabilities of the co. Share Capital Authorized Issued Subscribed Paid up
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20. Liabilities Revenue Reserves General Specific Purpose is to meet any unforeseen contingency or to utilize the same for expansion of the business Purpose is specific or definite
21. Liabilities: …..cont Reserves & Surplus: 1. Capital Reserve. 2. Capital Redemption Reserve. 3.Share Premium Account. 4. Debenture Redemption Reserve. 5. Revaluation Reserve 6.Revenue Reserve 7.Surplus i.e., balance in the statement of Profit & Loss . Notes: If preference shares are redeemed out of profits, a sum equal to nominal amt of shares should to be transferred to reserve A/c called CRR, which in turn can be utilized for issue of bonus shares.
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26. Assets: ……cont - 25 - Investments Govt. & Trust Securities Shares, debentures & bonds of various cos. Shares, debentures & bonds of subsidiary co. Investment in Fixed Asset. Investments should always be shown at Cost or Market value, whichever is Lower (Accounting Standard -13)
27. Assets : ……cont Current Assets, Loans & Advances : Assets which are likely to be converted into cash within a year. Current Assets – incl. Cash & bank Balances, Sundry debtors (net of provision for doubtful debts), accrued interest on investments etc. Loans & Advances – incl. cash loan given to different persons, advances against purchase of goods & various expenses etc. - 26 -
28. Assets: ……cont Miscellaneous Expense : That part of expenses which are not written off up to the date of Balance Sheet. Eg –Development expenses not adjusted, Preliminary expenses, Discount allowed on issue of shares or debentures. - 27 -
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30. Balance Sheet Prescribed format – as per Part 1 Schedule VI - 29 - Schedule Amt (Rs) Sources of Funds: 1 SHAREHOLDER’S FUND (a) Share Capital A xxxx (b) Reserves & Surplus B xxxx 2 LOAN FUNDS (a) Secured Loans C xxxx (b) Unsecured Loans D xxxx 3 TOTAL FUNDS EMPLOYED XXXX
31. Part 1 Schedule VI ……..cont - 30 - Schedule Amt(Rs) Application of funds: 4 FIXED ASSETS (a) Gross Block F xxxx (b) Less : Accumulated Depreciation xxxx (c) Net Block xxxx (d) Capital Work –in-Progress xxxx 5 INVESTMENTS G xxxx 6 CURRENT ASSETS,LOANS & ADVANCES (a) Interest accrued on investment xxxx (b) Inventories H xxxx
32. Part 1 Schedule VI ……..cont - 31 - Schedule Amt(Rs) (c) Unbilled Revenues xxxx (d) Sundry Debtors I xxxx (e) Cash & bank Balances J xxxx (f) Loans & Advances K xxxx 7 CURRENT LIABILITIES & PROVISIONS (a) Current liabilities L xxxx (b) Provisions M xxxx 8 NET CURRENT ASSET [ (6) – (7)] xxxx 9 MISCELLANEOUS EXPENDITURE xxxx 10 TOTAL ASSETS (NET) XXXX
33. Prescribed format of Profit & Loss Account – Part 2,Schedule VI - 32 - Schedule Amt(Rs) INCOME: 1 Information technology & consultancy services N xxxx 2 Sale of equipment & software licenses. O xxxx 3 Other income xxxx TOTAL INCOME XXXX EXPENDITURE: 4 Employee Costs P xxxx 5 Operation & other expenses Q xxxx TOTAL EXPENDITURE XXXX
34. Part 2,Schedule VI …..cont - 33 - Schedule Amt(Rs) Profit before additional performance incentive, interest, depreciation, taxes & exceptional items.[ TOTAL INCOME – TOTAL EXPENDITURE] XXXX 6 Additional Performance incentive xxxx 7 Interest xxxx 8 Depreciation F xxxx Profit before tax & exceptional items XXXX 9 Provision for Taxes xxxx Profit before exceptional items XXXX 10 Profit on sale of long term investment xxxx NET PROFIT FOR THE YEAR XXXX 11 Balance b/fwd from previous year xxxx Amount available for Appropriation XXXX
35. Part 2,Schedule VI …..cont - 34 - Schedule Amt(Rs) 12 APPROPRIATIONS (a) Interim dividend xxxx (b) Proposed final dividend xxxx (c) General Reserve xxxx (d) Balance carried to balance sheet xxxx