1. Dr.S.S.Jadhav Head, Dept of Commerce mrs.k.s.k. college beed

2. Profit and Loss Account
COMPANY FINAL ACCOUNT
• Accounting is an art, it is an art of recording transaction and reporting results. Final account are for results.
• Final accounts are prepared to show business profit over a period of time and business position at a point of time.
• Final Account supply a wealth of information incomes, expenses, profits, assets, liabilities, reserves, almost everything about the business.
• Final account explain the performance and the position of a company far better than a whole library of books. They are such a wonderful statements.
• Preparation of final accounts is compulsory for a company. The final accounts of company consist of –
1. Profit and Loss Account
2. Profit and Loss Appropriation Account
3. Balance Sheet.
Profit and Loss Account
Profit and Loss account shows the result of business operations during a particular period of time. The profit and Loss account itself is divided in to two parts- the first part for calculating gross profit and second part for calculating net profit. It is prepared at the end of an accounting period and shows profit or loss made during that period. The Specimen account given below

3. ……….…..Co.Ltd.
Profit and Loss A/c
For the year ended ………….
Dr.
Cr.
Particulars
L/F Rs
Rs.
To Opening Stock
To Purchases
To wages
To fuels
To coal and coke
To carriage inward
To fright
To factory exp
To Gross Profit c/d
---- …… ……
By Sales
By Closing Stock
……..... …… ……

4. ……….…..Co.Ltd. Profit and Loss A/c For the year ended …………. Dr. Cr.
Particulars
L/F Rs
Particulars4
Rs.
To salaries
To indirect wages
To Rent and rates
To Insurance
To Stationery & Printing
To Postage & Telegrams
To Directors fees
To Advertisement
To discount allowed
To commission paid
To carriage outwards
To provision for doubtful debts
To Provision for income tax
To Debenture interest
To travelling expenses
To Legal expenses
To sundry expenses
To General expenses
To trade expenses
To Repairs
To Depreciation
To Net Profit c/d
….. ….
_____
By Gross Profit b/d
By Rent received
By Interest Received
By Discount received
By commission received
By Dividend received
By Bad debts recovered
By Miscellaneous receipts
By Transfer Fees
……..... ……
______

5. Profit and Loss Appropriation A/c
Profit and Loss Appropriation Account
Appropriation means division. Profit and Loss Appropriation Account shows the division of company’s profits. The Profit and Loss Appropriation appears as follows:
……….…..Co.Ltd.
Profit and Loss Appropriation A/c
For the year ended ………….
Particulars
L/F Rs
Rs.
To dividend paid
To Dividend proposed
To interim dividend
To Bonus to shareholders
To Transfer to sinking fund for redemption of debenture
To Transfer to capital redemption reserve
To transfer to dividend equalisation
To Transfer to investment fluctuation reserve
To transfer to general reserve
To Transfer to contingency reserve
To Balance carried to Balance sheet
---- ……
…..
By Previous year profit
By current year profit
By transfer from reserves
By provision no longer required …… ……

6. The Indian companies Act,1956
Balance Sheet
A balance sheet is a statement of assets and liabilities. It shows the financial position of a business on a particular date. The balance sheet of a company must be prepared in the prescribed for, the summarised version of which is given below:
The Indian companies Act,1956
Schedule VI Part I
(Section 211)
……….…..Co.Ltd.
Balance Sheet
As at ………….
Liabilities Rs
Assets
Rs.
Share Capital:
Authorised
Issued:
Subscribed:
Less: Call in arrears
Add: Forfeited shares
Reserves and Surplus:
Capital reserved
General Reserved
Share premium
Debenture redemption fund
Capital redemption reserve
Profit and Loss Appropriation A/c
---- ……
….. ….
Fixed Assets :
Goodwill
Land and Building
Leaseholds
Railway sidings
Plant and Machineries
Furniture and Fittings
Patents and Trademarks
Development of property
Live stocks
Vehicals
Investments:
Govt. Bonds …… ……

7. Liabilities Rs
Assets
Rs.
Secured Loans :
Debentures
Bank Loans
Interest due on above
Unsecured Loans:
Public deposits
Short term Loans
Current Liabilities:
Bill payable
Sundry Creditors
Unclaimed dividend
Outstanding expenses
Interest accrued but not due
Provisions:
Provision for taxation
Proposed dividend
Provident fund
Pension fund
Insurance fund
----
......
….. ……
Shares and debentures in other companies
Current Assets:
Interest Accrued on Investments
Stores and Spare parts
Loose tools
Closing stock
Sundry debtors
Cash in hand
Cash at bank
Loan and Advanced:
Bill receivable
Prepaid insurance
Miscellaneous Expenses:
Preliminary Expenses
Discount on Issue of shares and Debenture
Underwriting Commission
Interest paid out f capital during construction
Advertising suspense Account
Profit and Loss account:
Net Loss …. …… ……