Corporate Accounting

7

Final Accounts of Companies

LEARNING OBJECTIVES

After studying this chapter you should be able to:

1. Understand the statutory provisions relating to the preparation of profit and loss A/c of the limited companies.

2. Differentiate the preparation of final accounts of companies from other form of business organizations.

3. Understand some important and fundamental principles for the preparation of final accounts: materiality; prior period items; extraordinary items; changes in accounting policies; contingencies; debentures—(i) interest on debentures, (ii) income tax on interest on debentures and (iii) discount or cost of issue of debentures—remuneration to directors, managers and managing director; commission to managerial personnel; dividends ...