Professional Documents
Culture Documents
Preparation of Financial statements from Trial Balance 1. Profit & Loss Account 2. Balance Sheet
Regulatory Bodies
Ministry of Corporate Affairs ICAI SEBI CBDT RBI International Accounting Standards Board
Regulatory bodies :Though Accounting is not governed by any Act , there are bodies which influence and regulate accounting and financial reporting.
Government ( Company Law Board ). Companies Act regulates the form and contents of financial reports , books of accounts to be maintained, audit etc. ICAI : ICAI has issued various standards known as Accounting Standards which deals with accounting and reporting practices on various matters. It gives professional opinion on various accounting matters which has an influence on accounting practices. SEBI : SEBI regulates companies whose stocks are listed in the stock exchanges. Its main function is to protect the interests of investors and promote a healthy securities market. SEBI has also involved itself in ensuring that financial statements give a true and fair view of state of affairs of the company. The requirements as to preparation of cash flow statement , submission of quarterly results etc. is a step towards that direction. CBDT : Income Tax authorities also influence the preparation of financial statements through various provisions for computing tax on income. Such provisions ensure that accounting practices are not misused to avoid or evade taxes. RBI : RBI has also from time to time prescribed accounting and reporting requirements for financial institutions International Accounting Standards Board : With a view to bring about uniformity in accounting practices and reporting IASB has developed International Financial Reporting Standards. With globalization and listing of shares in foreign markets , it is necessary that a uniform set of Accounting practices be followed across .
Format of Horizontal Balance Sheet P.Y Liabilities C.Y P.Y Assets C.Y
1. 2. 3. 4. 5.
Share Capital Reserves & Surplus Secured Loans Unsecured Loans Current Liabilities and and Provisions A. Current liabilities B. Provisions
1. Fixed Assets 2. Investments 3. Current Assets, Loans and Advances A. Current Assets B. Loans and Advances 4. 1 Miscellaneous Expenditure 2. Profit and Loss A/c Dr bal
Vertical form of Balance Sheet I. Sources of funds 1. Shareholders funds Share capital Reserves & Surplus 2. Loan Funds Secured loans Unsecured loans II. Application of funds 1. Fixed Assets 2. Investments 3. Current assets , loans and advances less: Current liabilities and provisions 4. Miscellaneous expenditure.
Format of Vertical Profit & Loss Account Income Sales Others Expenditure Materials consumed and purchases Manufacturing