Banking Companies

2.
General Ledger: General ledger provides details regarding expenses and asset not
covered under subsidiary books and also contains the control accounts of subsidiary
books.
Subsidiary Ledgers
It includes:
(a) Receiving Cashiers Counter Cash !ook"
(b) #aying Cashiers Counter Cash !ook"
(c) Current $ccounts %edger"
(d) &avings !ank $ccounts %edger"
(e) 'ixed (eposit $ccounts %edger
(f) Invest)ent %edger"
(g) Cash Credit %edger"
(h) %oan %edger"
(i) !ills (iscounted and #urchased %edger"
(*) Recurring (eposit $ccounts %edger"
(k) 'ixed (eposit $ccounts %edger"
(l) Custo)ers $cceptance+ ,ndorse)ent and Guarantee %edger etc."
Other Registers and Memorandum Books
It includes:
(a) !ills for Collection Register"
(b) &hare &ecurity Register"
(c) -e.ellery Register"
(d) (e)and (raft Register"
(e) &afe Custody Register"
(f) &tanding /rder Register"
(g) (ishonored Che0ue Register"
(h) %etter of Credit Register"
(i) %ockers Register etc."
Special Features of Bank Accounting
1he follo.ing are the features of bank accounting"
2. !anking co)panies have to )aintain books of accounts under (ouble3,ntry
&yste).
2. It has to )aintain all books of accounts+ as re0uired under the provisions of the
!anking Regulation $ct.
4. 1he posting of transactions in the ledger .ill be based on debit5credit slips. (1hat
is+ slip syste) of ledger posting is follo.ed in banking co)panies).
6. &elf3balancing syste) of ledge is follo.ed in accounting+ by banking co)panies.
SOM !M"OR#A$# "RO%!S!O$S OF #& BA$'!$G RG(LA#!O$ A)#* +,-,
!. Share )apita
(a) $ banking co)pany can issue only e0uity shares. (&ection 22).
(b) 1he subscribed capital of a banking co)pany (carrying on business in India) )ust
be atleast one3half of the authorised capital" and the paid3up capital )ust be atleast
one3half of the subscribed (&ection 22).
(c) 1he total of paid3up capital and reserves )ust be atleast the a)ount specified in
&ection 22+.hich have been given belo.:
7ini)u) 1otal of
#aid3up capital and
reserves Rs.
2. 'or banking co)panies incorporated outside India
(i.e.+ 'oreign !anks)
(a) If it has place of business in 7u)bai or 8olkata" or both
(b) If it has place of business other than in 7u)bai or
8olkata"
2. 'or !anking Co)panies Incorporated in India
(a) If it has place of business in 7u)bai or 8olkata" or both
(b) If it does not have place of business in 7u)bai or 8olkata"
but have place of business
(I) in )ore than one state
(II) in only one state
3 If there is only one place of business
3 If it has )ore than one place of businesses
'or principal place of business
'or every other place of business+ in the sa)e district
'or every other place of business outside the district
(1he total+ in this case ho.ever+ need not exceed
Rs. 9+::+:::)
(c) If it has place and business in one state and also have place
of business in 7u)bai or 8olkata" or both
(I) for place of business in 7u)bai or 8olkata" or both
(II) for each place situated outside the city of 7u)bai and
8olkata
(1he total in this case+ ho.ever+ need not exceed Rs.
2:+::+:::)
2:+::+:::
29+::+:::
2:+::+:::
9+::+:::
9:+:::
2+::+:::
$dditional 2:+:::
$dditional 29+:::
9+::+:::
$dditional 29+:::
(d) #rivate banks registered as a pubic li)ited co)pany under the co)panies act+
2;9<+ )ust have a )ini)u) paid = up = capital of Rs. 2:: crores.
(e) 1he capital ade0uacy Ratio (C$R) of all the banks operating in India )ust be >?+
and it should be 2:? by 2::2. (Capital $de0uacy Ratio Refers to the percentage
of capital and reserves @after .riting off bad debtsA to the assets of the bank).
!!. Statutory Reser/e
$ccording to &ection 2B(2) of the !anking Regulation $ct+ every banking co)pany+
incorporated in India+ )ust transfer at least 29? of its annual profits (before declaring
dividends) to &tatutory Reserve. &uch transfer )ust be )ade until the Reserve (along .ith
share pre)iu)+ if any) exceeds the paid3up capital.
!!!. )ash Reser/e 0)ash Reser/e Ratio1
$ccording to &ection 62 of the !anking Regulation $ct+ every scheduled and non3
scheduled !ank )ust deposit .ith Reserve !ank of India+ an a)ount e0ual to 4? of its ti)e
and de)and liabilities. #resently+ the percentage is >?. R!I has po.ers to increase the
percentage upto 2:?.
!%. Statutory Li2uidity Ratio
,very !anking Co)pany )ust invest 29? of its ti)e and de)and liabilities (i.e.+ total
deposits) in God and &ecurities. 1he percentage can be increased upto 6:? by R!I. 1his
e0uip)ents is provided under &ection 26 of the !anking Regulation $ct.
%. Assets in !ndia
$ccording to &ection 29 of the !anking Regulation $ct+ every !anking Co)pany
)ust have assets in India+ e0uivalent to at least B9? of its ti)e and de)and liabilities+ at the
close of business on the last 'riday of every 0uarter.
%!. !n/estment in Share and 3ebentures
/ther than in exceptional cases provided in &ection 2;+ no banking co)pany shall
hold shares and debentures of another co)pany+ )ore than 4:? of the concerned co)panys
paid3up capital or its o.n paid3up capital.
%!!. 3eclaration and "ayment of 3i/idends
$ccording to &ection 29+ no banking co)pany can declare and pay dividends until all
capitaliCed expenses (i.e.+ preli)inary expenses+ brokerage+ inde)nity co))ission etc.) have
been co)pletely .ritten off.
%!!!. "ayment of )ommission* Brokerage or Remuneration in respect of !ssue of Shares
or 3iscount on issue of Shares
$ccording to section 24 of the !anking Regulation $ct+ such pay)ent or discount
cannot exceed 2.9? of the paid3up value of the said shares.
!4. (ncalled )apital
$ccording to &ection 26+ a banking co)pany cannot create any charge on uncalled
capital.
4. Restrictions on Loans and Ad/ances.
$ccording to section 2:+ a banking co)pany is bound by the follo.ing restrictions
regarding loans and advances:
2. It cannot grant any loans or advances on the security of its o.n shares:
2. It cannot enter into any co))it)ent for granting any loan or advance to or on
behalf of the follo.ing persons"
(a) $ny of its directors"
(b) $ny fir) in .hich any of its director is interested as partner+ )anager+
e)ployer or guarantor.
(c) $ny co)pany (not being a subsidiary of a banking co)pany or a co)pany
registered under section 29 of the co)panies act+ 2;9< or a govern)ent
co)pany) of .hich any of the directors of the banking co)pany is a
director+ )anager or e)ployee or guarantor or in .hich he holds
substantial interest"
(d) $ny individual in respect of .ho) any of its directors is a partner or
guarantor.
F!$AL A))O($#SOF BA$'!$G )OM"A$!S
&ection 2;+ schedule III of the banking regulations act+ gives the for)at for the
preparation of 'inal $ccounts of !anking Co)panies. 1he present for)at is applicable .ith
effect 2
st
$pril+ 2;;2.
1he final accounts of banking co)panies include preparation of profit and loss
account and balance sheet. 1he prescribed for)ats of the t.o+ along .ith for)ats of
schedules to be prepared are given belo.:
#he #hird Schedule
(&ee &ection 2;)
Form 5A6
Form of Balance Sheet
!alance sheet of DDDDDDDDDDDDD.(here enter na)e of the banking co)pany)
!alance sheet as on 42
st
7arch (year)
&chedule
$s on 42.4D.
(Current year)
$s on 42.4D
(previous year)
)apital7 Liabilities
Capital 2
Reserve E surplus 2
(eposit 4
!orro.ings 6
/ther liabilities and provisions 9
1/1$%
ASS#S
Cash and balance .ith Reserve !ank of
India
<
!alances .ith banks and )oney at call
and short notice
B
Invest)ents >
$dvances ;
'ixed assets 2:
/ther assets 22
1/1$%
Contingent liabilities. 22
!ills for collection
S)&3(L +8 )A"!#AL
$s on 42.4D.
(Current year)
$s on 42.4D
(previous year)
!. FOR $A#!O$AL!S3 BA$'S
Capital (fully o.ner by Central Govern)ent)
!!. FOR BA$'S !$)OR"ORA#3 O(#S!3
!$3!A )A"!#AL
(I) (1he a)ount brought by banks by .ay of
start =up capital as prescribed by R!I
should be sho.n under this head)
(II) $)ount of deposit kept .ith the R!I
under &ection 22(2) of the !anking
Regulation $ct+ 2;6;.
!!!. FOR O#&R BA$'S
$uthorised capital
(. &hares of Rs. ,ach)
Issued Capital
(D&hares Rs. ,ach)
&ubscribed Capital
(D&hares Rs. ,ach)
Called3up capital
(D&hares Rs. ,ach)
%ess : Calls unpaid
$dd : 'orfeited &hares
1/1$%
S)&3(L 98 RSR%S 7 S(R"L(S
$s on 42.4D.
(Current year)
$s on 42.4D
(previous year)
!. Statutory Reser/es
/pening !alance
$dditions (uring the year
(eductions during the year
!!. )apital Reser/es
/pening !alance
!!!. Share "remium
/pening !alance
!%. Reser/es and Other Reser/es
/pening !alance
%. Balance in profit and loss amount
#O#AL
S)&3(L :8 3"OS!#S
$s on 42.4D.
(Current year)
$s on 42.4D
(previous year)
A. !. 3emand 3eposits
(I) 'ro) !anks
(II) 'ro) /thers
!!. Sa/ings Bank 3eposits
!!!. #erm 3eposits
(I) 'ro) !anks
(II) 'ro) /thers
#otal
B. (I) (eposits of branches in India
(II) (eposits of branches outside India
#O#AL
S)&3(L - ; BORRO<!$GS
$s on 42.4D.
(Current year)
$s on 42.4D
(previous year)
!.
!!.
Borro=ing in !ndia
(I) Reserve !ank of India
(II) /ther !anks
(III) /ther institutions and agencies
Borro=ings outside !ndia
#O#AL
&ecured borro.ing in I E II above Rs.
S)&3(L > ; O#&R L!AB!L!#!S A$3 "RO%!S!O$S
$s on 42.4D.
(Current year)
$s on 42.4D
(previous year)
!.
!!.
!!!
!%
Bills "ayable
!nter ; office ad?ustments 0net1
!nterest accrued
Others 0including pro/isions1
#O#AL
S)&3(L @ ; )AS& A$3 BALA$)S <!#& RSR% BA$' OF !$3!A
$s on 42.4D.
(Current year)
$s on 42.4D
(previous year)
!
!!
)ash in hand
(Including foreign currency notes)
Balances =ith Reser/e
Bank of !ndia
(I) In Current $ccount
(II) In /ther $ccounts
#O#AL
S)&3(L A ; BALA$)S <!#& BA$'S 7 MO$B A# )ALL 7 S&OR#
$O#!)
$s on 42.4D.
(Current year)
$s on 42.4D
(previous year)
!.
!!
!n !ndia
(I) !alance .ith banks
(a) In Current $ccounts
(b) In other deposit accounts
(II) 7oney at call and short notice
(a) Fith banks
(b) Fith other institutions
#O#AL
Outside !ndia
(I) In Current $ccounts
(II) 7oney at call and short notice
#O#AL
GRA$3 #O#AL
S)&3(L C ; !$%S#M$#S
$s on 42.4D.
(Current year)
$s on 42.4D
(previous year)
!
!!.
!n/estments in !ndia in
I. Govern)ent securities
II. /ther approved securities
III. &hares
IG. (ebenture and bonds
G. &ubsidiaries and5or *oint ventures
GI. /thers (to be specified)
#O#AL
!n/estments outside !ndia in
I. Govern)ent securities (including
local authorities)
II. &ubsidiaries and5or *oint ventures
abroad
III. /ther invest)ents (to be specified)
#O#AL
GRA$3 #O#AL
S)&3(L ,; A3%A$)S
$s on 42.4D.
(Current year)
$s on 42.4D
(previous year)
A.
B.
).!
!!
(I) !ills purchased and discounted
(II) Cash credits+ overdrafts and loans
repayable on de)and
(III) 1er) loans
#O#AL
(I) &ecured by tangible assets
(II) Covered by !ank 5 Govern)ent
Guarantees
(III) Hnsecured
#O#AL
Ad/ances in !ndia
(I) #riority sectors
(II) #ublic sector
(III) !anks
(IG) /thers
#O#AL
Ad/ance outside !ndia
(I) (ue fro) banks
(II) (ue fro) others
(a) bills purchased and discounted
(b) syndicated loans
(c) others
#O#AL
GRA$3 #O#AL
0).! 7 !!1
S)&3(L +D; F!43 ASS#S
$s on 42.4D.
(Current year)
$s on 42.4D
(previous year)
!
!!
"remises
$t cost as on 42
st
7arch of the preceding year
$dditions during the year
(epreciation to date
Other fiEed articles 0including furniture 7
fiEture1
$t cost as on 42
st
7arch of the preceding year
$dditions during the year
(epreciation to date
#O#AL
S)&3(L ++; O#&R ASS#S
$s on 42.4D.
(Current year)
$s on 42.4D
(previous year)
!
!!
!!!
!%
%
%!
Inter = office ad*ust)ents (net)
Interest accrued
1ax paid in advance5tax deducted at source
&tationary and sta)ps
Ion3banking assets ac0uired in satisfaction
clai)s
/thers
#O#AL
Jin case there is any unad*usted balance of loss the sa)e )ay be sho.n under this ite) .ith
appropriate footnote.
S)&3(L +9; )O$#!$G$# L!AB!L!#!S
$s on 42.4D.
(Current year)
$s on 42.4D
(previous year)
! Clai)s against the bank not ackno.ledged as
debts
!! %iability for partly paid invest)ents
!!! %iability on account of outstanding for.ard
exchange contracts
!% Guarantees given on behalf of constitutes
(a) In India
(b) /utside India
% $cceptances+ endorse)ents and other
obligations
%! /ther ite)s for .hich the bank is
contingently liable
#O#AL
Form 5B6
Form of "rofit 7 Loss Account
"rofit 7 Loss account for the year ended :+
st
MarchFFFFFFF
&chedule
$s on 42.4D.
(Current year)
$s on 42.4D
(previous year)
!
!!
!!!
!%
!$)OM
Interest earned
/ther inco)e
#O#AL
4"$3!#(R
Interest expended
/perating expenses
#rovisions and contingencies
#O#AL
"ROF!# G LOSS
Iet profit 5 %oss (33333) for the year
#rofit 5 loss (33333) brought for.ard
#O#AL
A""RO"R!A#!O$S
1ransfer to statutory reserves
1ransfer to other reserves
1ransfer to Govern)ent5#roposed
dividend
!alance carried over to balance
sheet
#O#AL
24
26
29
2<
S)&3(L +:; !$#RS# AR$3
$s on 42.4D.
(Current year)
$s on 42.4D
(previous year)
!
!!
!!!
!%
%
!nterest G discount on ad/ancesGbills
!ncome on in/estments
!nterest on balances =ith reser/e bank of
!ndia and other inter8bank funds
Others
#O#AL
S)&3(L +-; O#&R !$)OM
$s on 42.4D.
(Current year)
$s on 42.4D
(previous year)
!
!!
!!!
!%
%
%!
%!!
Co))ission+ exchange and brokerage
#rofit on sale of invest)ents
%ess: %oss on sale of invest)ents
#rofit on revaluation of invest)ents
%ess: %oss on revaluation of invest)ents
#rofit on sale of land+ buildings and other
assets
%ess: loss on sale of land+ buildings and other
assets.
#rofit on exchange transactions
%ess: %oss on exchange transactions
Inco)e earned by .ay of dividends etc. fro)
&ubsidiaries 5 co)panies and 5 or *oint
ventures abroad 5 in India
7iscellaneous Inco)e
#O#AL
$ote: (nder !tems ! to % loss figures may be sho=n
in brackets.
S)&3(L +>; !$#RS# AR$3
$s on 42.4D.
(Current year)
$s on 42.4D
(previous year)
!
!!
!!!
!nterest on deposits
!nterest on Reser/e Bank of !ndiaGinter ;
bank borro=ing
Others
#O#AL
S)&3(L +@; O#&R !$)OM
$s on 42.4D.
(Current year)
$s on 42.4D
(previous year)
!
!!
!!!
!%
%
%!
%!!
%!!!
!4
4
4!
4!!
#ay)ents to and provisions for e)ployees
Rent+ taxes and lighting
#rinting and stationery
$dvertise)ent and publicity
(epreciation on banks publicity
(irectors fees+ allo.ance and expenses
$uditors fees+ allo.ances and expenses
(including branch auditors)
%a. charges
#ostage+ 1elegra)s+ 1elephones+ etc.
Repairs and )aintenance
Insurance
/ther ,xpenditure
#O#AL
Guidelines of RB! for compilation of Financial Statements
Balance Sheet
!tem )o/erage
$otes and instructions for
compilation
)apital $ationaliHed Banks
Capital ('ully o.ned by Central
Govern)ent)

1he capital o.ned by Central
Govern)ent as on the date of the
balance sheet including contribution
fro) Govern)ent+ if any+ for
participating in .orld bank pro*ects
should be sho.n.
!anking co)panies incorporated
outside India
Other Banks 0!ndian1
$uthorised Capital
(D.&hares of Rs. ,ach)
Issued Capital (D&hare of Rs.
,ach)
&ubscribed capital (..share of Rs.
....each)
Called up capita (Dshare of
RsD.each)
%ess: calls unpaid $dd: 'orfeited
shares: #aid up capital)
I
II
1he a)ount brought in by
banks by .ay of start up
capital as prescribed by R!I
should be sho.n under this
head.
1he a)ount of deposit kept
.ith R!I+ under sub3section 2
of section 22 of the !anking
Regulation $ct+ 2;6; should
also be sho.n.
$uthoriCed+ issued+ subscribed+
called3up capital should be
given separately. Calls = in =
arrears .ill be deducted fro)
called up capital .hile the paid
= up value of forfeited shares
should be added thus arriving
at the paid3up capital. Fhere
necessary+ ite)s .hich can be
co)bined should be sho.n
under one head for instance
KIssued and &ubscribed Capital
$otes ; General
1he charges in the above ite)+ if
any+ during the years+ say+ fresh
contribution )ade by Govern)ent+
fresh issue of capital+ capitaliCation
of reserves+ etc. )ay be explained in
the notes.
Reser/es and
Surplus
0!1 Statutory Reser/es Reserves created in ter)s of &ection
2B or any other section of $
!anking Regulation $ct )ust be
separately disclosed.
0!!1 )apital Reser/e 1he expression Kcapital reserves
shall not include any a)ount
regarded as free for distribution
through the profit E loss
account. &urplus revaluation
should be treated as Capital
Reserves. &urplus on translation
of the financial state)ents of
foreign branches (.hich
includes fixed assets also) is not
a revaluation reserve.
0!!!1 Share "remium #re)iu) on issue of share capital
)ay be sho.n separately under
this head.
0!%1 Re/enue and other
Reser/es
1he expression KRevenue Reserve
shall )ean any reserve other
than capital reserve. 1his ite)
.ill include all reserves+ other
than those separately classified.
1he expression Kreserve shall
not include any a)ount .ritten
off or retained by .ay of
providing for depreciation+
rene.als or di)inution in value
of assets or retained by .ay of
providing for any kno.n
liability.
0%1 Balance of "rofit Includes balance of profit after
appropriations. In case of loss
the balance )ay be sho.n as a
deduction.
Iotes = General
7ove)ent in various categories of
reserves should be sho.n as
indicated in the schedule.
3eposits A 0!1 3emand 3eposits
(I) 'ro) !anks
(II) 'ro) others
Includes all bank deposits repayable
on de)and.
Includes all de)and deposits of the
non3bank sectors. Credit balances in
overdrafts+ cash credit accounts+
deposits payable at call+ overdue
deposits inoperative current
accounts+ )atured ti)e deposits and
cash certificates+ certificates of
deposits+ etc.+ are to be included
under this category.
0!!1 Sa/ings Bank 3eposits Includes all savings banks deposits
(including inoperative savings
bank accounts).
0!!!1 #erm 3eposits
(I) 'ro) !ank
(II) 'ro) others
Includes all types of bank deposits
repayable after a specified ter).
Includes all types of deposits of the
non3bank sector repayable after a
specified ter). 'ixed deposits+
cu)ulative and recurring deposits+
cash certificates+ certificates of
deposits+ annuity deposits+ deposits
)obiliCed under various sche)es+
ordinary staff deposits+ foreign
currency non3resident deposits
accounts+ etc. are to be included
under this category.
!. (I) (eposits of !ranches in
India
(II) (eposits of branches
outside India.
1he total of these t.o ite)s .ill
agree .ith the total deposits.
$otes ; General
(a) Internal #ayable on deposits
.hich is accrued but not due
should not be included but
sho.n under other
liabilities.
(b) 7atured ti)e deposits and
cash certificates+ etc. should
be treated as de)and
deposits.
(c) (eposits under special
sche)es should be included
under ter) deposit if they
are not payable on de)and.
Fhen such deposits have
)atured for pay)ent they
should be sho.n under
de)and deposits.
(d) (eposits fro) banks .ill
include deposits fro) the
banking syste) in India+
Co3operative banks+ foreign
banks .hich )ay or )ay
not have a presence in India.
Borro=ings 0!1 Borro=ings in !ndia
(I) Reserve !ank of
India
(II) /ther !anks
(III) /ther institutions and
agencies
(II) !orro.ings /utside India
&ecured borro.ing included
above.
Includes borro.ing 5 refinance
obtained fro) Reserve !ank of India
Includes borro.ings 5 refinance
obtained fro) co))ercial banks
(including co3operative banks).
Includes borro.ings5refinance
obtained fro) co))ercial banks
(including co3operative banks).
Includes borro.ing 5 refinance
obtained fro) Industrial
(evelop)ent !ank of India+ ,xport
I)port !ank of India+ Iational !ank
for $griculture and Rural
(evelop)ent and other institutions+
agencies (including liability against
participation certificates+ if any)
Includes borro.ing of Indian
branches abroad as .ell as
borro.ings of foreign branches.
1his ite) .ill be sho.n separately+
includes secured borro.ing 5
refinance in India and outside India.
$otes ; General
(I) 1he total of I E II .ill
agree .ith the total
borro.ings sho.n in the
balance sheet.
(II) Inter3office transactions
should not be sho.n as
borro.ings.
(III) 'unds raised by foreign
branches by .ay of
certificates of deposits+
notes+ bonds+ etc. should
be classified depending
upon docu)entations+ as
Kdeposits+ Kborro.ing+
etc.
(IG) Refinance obtained by
banks fro) reserve bank
of India and various
institutions are being
brought under the head
K!orro.ings. Lence+
advance .ill be sho.n at
the gross a)ount on the
assets side.
Other liabilities
and pro/isions
I. !ills #ayable Includes drafts+ telegraphic transfer+
traveler Che0ue+ )ail transfers
payable+ pay slips+ bankers
Che0ue and other )iscellaneous
ite)s.
!!. !nter ; office ad?ustments
0net1
1he inter3office ad*ust)ents balance+
if in credit+ should be sho.n
under this head. /nly net
position of inter3office accounts+
inland as .ell as foreign+ should
be sho.n here.
!!!. !nterest accrued Includes interest accrued but not due
on deposits and borro.ings.
!%. Others 0including
pro/isions1
Includes net provision for inco)e
tax and other taxes like interest
tax (less advance pay)ent+ tax+
deducted at source+ etc). surplus
in aggregate in provisions for
bad debts provision account+
surplus in aggregate in
provisions for depreciation in
securities+ contingency funds
.hich are not disclosed as
reserve but are actually in the
nature of reserves+ proposed
dividend5transfer to
Govern)ent+ other liabilities
.hich are not disclosed under
any of the )a*or head such as
unclai)ed dividend+ provisions
and funds kept for specific
purposes+ unexpired discount+
outstanding charges like rent+
conveyance etc. certain types of
deposits like staff security
deposits+ )argin deposits+ etc.
.here the repay)ent is not free
should also be included under
this head.
$otes ; General
(I) 'or arriving at the
balance of inter3office
ad*ust)ents all connected
inter3office accounts
should be aggregated and
the net balance only .ill
be sho.n+ representing
)ostly ite) in transit and
unad*usted ite)s.
(II) 1he interest accruing on
all deposits+ .hether the
pay)ent is due or not+
should be treated as a
liability.
(III) It is proposed to sho.
only pure deposits under
this head Kdeposits and
hence all surplus
provisions for bad and
doubtful debts+
contingency funds+ secret
reserves etc. .hich are
netted off against the
)ash and
Balances =ith
the Reser/e
Bank of !ndia
!. )ash in &and (Including
foreign currency notes)
!!. Balances =ith Reser/e Bank
of !ndia
(I) in current account
(II) in other account
!. !n !ndia
(I) !alances .ith banks
(a) in current account
(b) in other deposit
accounts

(II) 7oney at call short notice
(a) .ith banks
(b) .ith other
institutions
II. /utside India
(I) Current $ccounts
(II) (eposits $ccounts
(III) 7oney at call and
short notice
Includes cash in hand including
foreign currency notes and also
foreign branches in the case of
banks having such branches.
Includes all balances .ith banks in
India (Including co3operative).
!alance in current accounts and
deposit accounts should be sho.n
separately.
Includes deposits repayable .ithin
29 days or less than 29 days notice
lent in the inter3bank call )oney
)arket.
Includes balances held by foreign
branches and balances held by
Indian branches of the banks outside
India. !alance held .ith foreign
branches by other branches of the
bank should not be sho.n under this
head but should be included in inter3
branch accounts. 1he a)ount held in
Kcurrent account and Kdeposit
accounts should be sho.n
separately.
Includes deposits usually classified
in foreign countries as )oney at call
and short notice.
!n/estments !. !n/estments in !ndia
(I) Govern)ent
securities
(II) /ther approved
securities
(III) &hares
(IG) (ebentures and
shares
(G) Invest)ent in
subsidiaries5*oint
ventures
(GI) /thers
Includes central and state
govern)ent securities and
govern)ent treasury bills. 1hese
securities should be sho.n at the
book value. Lo.ever+ the difference
bet.een the book value and )arket
value should be given in the notes to
the balance sheet.
&ecurities other than govern)ent
securities+ .hich according to the
banking regulation act+ 2;6; are
treated as approved securities+
should be included here.
Invest)ents in shares of co)panies
and corporations not included in
ite) (ii) should be included here.
Invest)ents in debentures and books
of co)panies and corporations not
included in ite) (ii) should be
included here.
Invest)ents in subsidiaries5*oint
ventures (including RR!s) should be
included here.
Includes residual invest)ents+ if any+
like gold+ co))ercial papers and
other instru)ents in the nature of
shares 5 debentures 5 bonds.
!!. !n/estments outside !ndia
(I) Govern)ent
securities (including
local authorities)
(II) &ubsidiaries and 5 or
*oint ventures abroad
(III) /thers
$ll foreign govern)ent securities
including securities issued by the
local authorities )ay be classified
under this head.
$ll invest)ents )ade in the share
capital of subsidiaries floated outside
India and5or *oint ventures abroad
should be classified under this head.
$ll other invest)ents outside India
)ay be sho.n under this head.
Ad/ances $. (I) !ills purchased and
discounted
(II) Cash credits+ overdrafts
and loans repayable on
de)and
(III) 1er) loans
In classification under section K$+
all outstanding = in India as .ell
as outside = less provisions
)ade+ .ill be classified under
three heads as indicated and
both secured and unsecured
advances .ill be included under
these heads+ including overdue
install)ents.
B.
(I) &ecured by tangible
assets
(II) Covered by !ank 5
Govern)ent
guarantee
(III) Hnsecured
$ll advance or part of advances
.hich are secured by tangible assets
)ay be sho.n here. 1he ite) .ill
include advances in India and
outside India.
$dvances in India and outside India
to the extent they are covered by
guarantee of Indian and 'oreign
govern)ents and Indian and foreign
banks and (ICGC E ,CGC are to
be included
$ll advances not classified under (i)
and (ii) .ill be included here.
). !. Ad/ance in !ndia
(I) #riority sectors
(II) #ublic sector
(III) !anks
(IG) /thers
). !!. Ad/ances outside !ndia
(I) (ue fro) !anks
(II) (ue fro) others
(a) !ills purchased
and discounted
(b) &yndicated loans
(c) /thers
1otal of K$ should tally .ith total of
K! advance should be broadly
classified into K$dvances in India
and K$dvances outside India.
$dvances in India .ill be further
classified on the sartorial basis as
indicated.
$dvances to sectors .hich for the
ti)e being as classified as priority
sectors according to the instructions
of the Reserve !ank are to be
classified under the head K#riority
sectors+ such advances should be
excluded fro) ite) (ii) i.e.+ advances
to public sector. $dvances to Central
and &tate Govern)ent and other
govern)ent undertakings including
govern)ent co)panies and
corporation .hich are+ according to
the status+ to be treated as public
sector co)panies are to be included
in the category K#ubic &ector. $ll
advances to the banking sector
including co3operative bank .ill
co)e under the head K!anks+ all the
re)aining advances .ill be included
under the head Kothers and typically
this category .ill include non3
priority and advances to the private+
*oint and co3operative sectors.
$otes ; General
(I) 1he Gross a)ount of
advances including
refinance and rediscounts
but excluding provisions
)ade to the satisfaction
of auditors should be
sho.n as advance.
(II) 1er) loan .ill be loans
not repayable on de)and.
(III) Consortiu) advances
.ould be sho.n net of
share fro) other
participating
banks5institutions.
FiEed Assets !. "remises
(I) $t cost as on 42
st

7arch of the
preceding year
(II) $dditions during the
year
(III) (eductions during the
year
(IG) (epreciation to date
!!. Other FiEed Assets
(Including furniture and fixtures)
(I) $t cost on 42
st
7arch
of the preceding year
(II) $dditions during the
year
(III) (eductions during the
year
(IG) (epreciation to date
#re)ises .holly or partly o.ned by
the banking co)pany for the purpose
of business including residential
pre)ises should be sho.n against
Kpre)ises. In the case of pre)ises
and other fixed assets+ the previous
balance+ additions thereto and
deductions therefro) during the year
as also the total depreciation .ritten
off should be sho.n. Fhere su)s
have been .ritten off on reduction of
capital or revaluation of assets+ every
balance sheet after the first balance
sheet subse0uent to the reduction or
revaluation should sho. the revised
figures for a period of five years
.ith the date and a)ount of revision
)ade.

7otor vehicles and all other fixed
assets other than pre)ises but
including furniture and fixtures
should be sho.n under this head.
Other assets I. Inter = office ad*ust)ents (net) 1he inter3office ad*ust)ents balance+
if in debit+ should be sho.n
under this head. /nly net
position of inter3office accounts+
inland as .ell as foreign+ should
be sho.n here+ for arriving at
the net balance of inter3office
ad*ust)ent accounts+ all
connected inter3office accounts
should be aggregated and the net
balance+ if in debit only should
be sho.n representing )ostly
ite)s in transit and unad*usted
ite)s.
II. Interest accrued Interest accrued but not due on
invest)ents and advances and
interest due but not collected on
invest)ent .ill be the )ain
co)ponents of this ite). $s
banks nor)ally debit the
borro.ers account .ith interest
due on the balance sheet date+
usually there )ay not be any
a)ount of interest due on
advances. /nly such interest as
can be realiCed in the ordinary
course should be sho.n under
this head.
III. 1ax paid in advance 5 tax
deduced at source
1he a)ount of tax deducted at
source on securities+ advance tax
paid etc. to the extent that these
ite)s are not set off against
relative tax provision should be
sho.n against this ite).
IG. &tationery and sta)ps /nly exceptional ite)s of
expenditure on stationery like
bulk purchase of security paper+
loose leaf or other ledgers+ etc.
.hich are sho.n as 0uasi =
asset to be .ritten off over a
period of ti)e should be sho.n
here. 1he value should be on a
realistic basis and cost
escalation should not be taken
into account+ as these ite)s are
for internal use.
G. Ion = !anking assets
ac0uired in satisfaction of
clai)s
I))ovable properties5tangible assets
ac0uired in satisfaction of
clai)s are to be sho.n under
this head.
GI. /thers 1his .ill include ite)s like clai)s
.hich have not been )et+ for
instance+ clearing ite)s+ debit
ite) representing addition to
assets or reduction in liabilities
.hich have not been ad*usted
for technical reasons+ .ant to
particulars+ etc.+ advances given
to staff by a bank as e)ployer
and not as a banker+ etc. ite)s
.hich are in the nature of
expenses .hich are pending
ad*ust)ents should be provided
for and the provision noted
against this ite)s so that only
realiCable value is sho.n under
this head. $ccrued inco)e other
than interest )ay also be
included here.
)ontingent
liabilities
I. Clai)s against the bank not
ackno.ledged as debts
II. %iability for partly paid
Invest)ents.
III. %iability on account of
outstanding for.ard
exchange contracts.
MMMMM
%iabilities on partly paid shares+
debentures+ etc. .ill be included in
this head.
/utstanding for.ard exchange
contracts )ay be included here.
Bills for
collection
IG. Guarantees given on behalf
of constituents
(I) In India
(II) /utside India
G. $cceptances+ endorse)ent and
other obligations.
GI. other ite)s for .hich the
bank is contingently liable
Guarantees given for constituents in
India and outside India )ay be
sho.n separately.
1his ite) .ill include letters of
credit and bills accepted by the
bank of behalf of custo)ers.
$rrears of cu)ulative dividends+
bills rediscounted under.riting
contracts+ esti)ated a)ounts of
contracts re)aining to be
executed on capital account and
not provided for+ etc. are to be
included here. !ills and other
ite)s in the course of collection
and not ad*usted .ill be sho.n
against this ite) in the su))ary
version only. Io separate
schedule is proposed.
"ROF!# A$3 LOSS A))O($#
!nterest earned I. Interest5discount on
advances5bills
Includes interest and discount on all
types of loans and advances like
cash credit+ de)and loans+
overdrafts+ export loans+ ter)
loans+ do)estic and foreign bills
purchased and discounted
(including those rediscounted)+
overdue interest and also
interest subsidy+ if any+ relating
to such advances5bills.
II. Inco)e on invest)ents. Includes all inco)e derived fro) the
invest)ents portfolio by .ay of
interest and dividend
III. Interest on balances .ith
Reserve !ank of India
and other inter3bank
funds
Includes interest on balance .ith
Reserves banks and other banks+
call loans+ )oney )arket
place)ents etc.
IG. /thers Includes any other interest5discount
inco)e not included in the
above heads.
Other !ncome I. Co))ission+ exchange and
brokerage
Includes all re)uneration on service
such as co))ission on
collection+
co))ission5exchange on
re)ittances and transfers+
co))ission on letters of credit+
letting out of lockers and
guarantees+ co))ission on
govern)ent business+
co))ission on other per)itted
agency business including
consultancy and other services+
brokerage+ etc. on securities. It
does not include foreign
exchange inco)e.
II. #rofit on sale of invest)ents
%ess: %oss on sale of
invest)ents
Includes profit5loss on sale of
securities+ furniture+ land and
buildings+ )otor vehicle+ gold+
silver etc. only the net position
should be sho.n. If the net
position is a loss+ the a)ount
should be sho.n as a
III. #rofit on revaluation of
invest)ents
%ess: %oss on revaluation of
invest)ents
(eduction. 1he net profit5loss on
revaluation of assets )ay also
be sho.n under this ite).
IG. #rofit on sale of land+
buildings and other
assets less: %oss on
sale of land+ buildings
and other assets
G. #rofit on ,xchange
transaction
%ess: %oss on
exchange
transactions.
GI. Inco)e earned by
.ay of dividends etc.
fro) subsidiaries+
co)panies+ *oint
ventures abroad5in
India
Includes profit5loss on dealing in
foreign exchange+ all inco)e earned
by .ay of foreign exchange+
co))ission and charges on foreign
exchange transactions excluding
interest .hich .ill be sho.n under
interest+ only the net position should
be sho.n. If the net position is a
loss+ it is to be sho.n as a deduction.
GII. 7iscellaneous Inco)e Includes recoveries fro)
constituents for godo.n rents+
inco)e fro) banks properties+
security charges+ insurance etc.
and any other )iscellaneous
inco)e. In case any ite) under
this head exceeds one
percentage of the total inco)e+
particulars )ay be given in the
notes.
Internet
expended
I. Interest on (eposits Includes interest paid on all types of
deposits including deposits fro)
banks and other institutions.
II. Interest on Reserve !ank of
India5inter3bank
borro.ings
Includes discount5interest on all
borro.ings and refinance fro)
Reserve !ank of India and other
banks.
III. /thers Includes discount 5 interest on all
borro.ings 5 refinance fro)
financial institutions. $ll other
pay)ents like interest on
participation certificates+ penal
interest paid+ etc. )ay also be
included here. Included staff
salaries
Operating
Epenses
I. #ay)ents to and provisions for
e)ployees
Fages+ allo.ances+ bonus+ other
staff benefits like provident
funds+ pension+ gratuity+ liveries
to staff+ leave fare concession+
staff .elfare+ )edical allo.ance
to staff+ etc.
II. Rent+ taxes and lighting Includes rent paid by the banks on
buildings and other )unicipal
and other taxes paid (excluding
inco)e tax and interest tax).
,lectricity and other si)ilar
charges and levies. Louse rent
allo.ance and other si)ilar
pay)ents to staff should appear
under the head pay)ents to and
provisions for e)ployees.
III. #rinting and &tationary Includes books and for)s and
stationery used by the bank and
other printing charges .hich are
not incurred by .ay of publicity
expenditure.
IG. $dvertise)ent and publicity Includes expenditure incurred by the
bank for advertise)ent and
publicity purposes including
printing charges of publicity
)atter.
G. (epreciation on banks
property
Includes depreciation on banks o.n
property+ )otor cars and other
vehicles+ furniture+ electric
fitting+ vaults+ lifts+ leasehold
properties+ non3banking assets+
etc.
GI. (irectors fees+ allo.ances
and expenses.
Includes sitting fees and all other
ite)s of expenditure incurred on
behalf of directors. 1he daily
allo.ance+ hotel charges+
conveyance charges etc. .hich
though in the nature of
rei)burse)ent of expenses
incurred )ay be included under
this head. &i)ilar expenses of
local co))ittee )e)bers )ay
also be included under this head.
GII. $uditors fees and expenses
(including branch
auditors fees and
expenses)
Includes the fees paid to the statutory
auditors and branch auditors for
professional services rendered
and all expenses for perfor)ing
their duties+ even though they
)ay be in the nature of
rei)burse)ent of expenses. If
external auditors and other
services the expenses incurred
in that context including fees
)ay not be included under this
head but sho.n under Kother
expenditure.
GIII. %a. charges $ll legal expenses and
rei)burse)ent of expenses
incurred in connection .ith
legal services are to be included
here.
IN. #ostage+ telegra)s+
telephones etc.
Includes all postal charges like
sta)ps+ telegra)s+ telephone+
teleprinter etc.
N. Repairs and )aintenance Includes repairs to banks property+
their )aintenance charges etc.
NI. Insurance Includes insurance charges on banks
property+ insurance pre)ia paid
to deposit insurance E credit
guarantee corporation etc to the
extent they are not recovered
fro) the concerned parties.
NII. /ther ,xpenditure $ll expenses other than those not
included in any of the other
heads+ like+ licence fees+
donations+ subscriptions to
papers+ periodicals+
entertain)ent expenses+ travel
expenses+ etc. )ay be included
under this head. In case any
particular ite) under this head
exceeds one percentage of the
total inco)e particulars )ay be
given in the notes.
"ro/isions and
contingencies
MMMMM Includes all provisions )ade for bad
and doubtful debts+ provision for
taxation+ provision for
di)inution in the valve of
invest)ents+ transfer to
contingencies and other si)ilar
ite)s.
,. !n/estments
Invest)ents by bank could be in Govern)ent &ecurities+ &hares+ (ebentures+ !onds+
Hnits of H1I and 7utual 'unds+ Gold etc. 1hese ite)s )ust be sho.n under &chedule > =
OInvest)entsP on the assets side of the !alance &heet.
+D. Loans and Ad/ances
!anks advance loans in different no)enclatures like cash credits+ overdrafts+ bills
discounted5purchased+ ter) loans etc. 1hese ite)s )ust be sho. under &ection ; =
O$dvancesP on the assets side of the !alance &heet.
++. )losing Balance of Stationery and Stamps
1his )ust be sho.n under &chedule 22 = O/ther $ssetsP on the assets side of the
!alance &heet.
+9. )ontingent Liabilities
1hese are ite)s .hich beco)e liabilities on the happening of so)e event. 1his
include clai)s against the banks not ackno.ledged as debts+ liability for partly invest)ents+
liabilities on account of outstanding for.ard exchange contracts+ guarantees given on behalf
of custo)ers+ acceptances+ endorse)ents and other obligations etc. these are not found in trial
balance. If found in ad*ust)ents+ they should be sho.n under &chedule 22 = OContingent
%iabilitiesP. Lo.ever+ the contingent liabilities )ust be sho.n outside the !alance &heet+
since it does not for) a part of the total of balance sheet+ not being actual liabilities.
+:. Bills for )ollection* being Bills Recei/able
1his also is not a trial balance ite). ,ven is given in trial balance+ it .ill have both
debit and credit balances. 1his ite) should be sho.n as a footnote to the !alance &heet.
+-. "ro/ision and )ontingencies
$ny provisions like provisions for bad and doubtful debts+ provision for tax etc.+ and
contingencies found in trial balance .ill be sho.n under &chedule 9 = O/ther %iabilitiesP on
the liabilities side of the !alance &heet.
If these ite)s are found in additional infor)ation (i.e.+ ad*ust)ents) they should be
sho.n in t.o places"
(a) Hnder Oprovisions and contingenciesP on the expenditure side of profit and
loss account" and
(b) Hnder &chedule 9 = O/ther %iabilities and #rovisionsP on the liabilities
side of the !alance &heet.
+>. $on ; Banking Assets
1hey refer to those assets ac0uired fro) custo)ers for non3repay)ent of loan. 1hey
)ust be sho.n under schedule 22 = O/ther $ssetsP on the assets side of the !alance &heet.
+@. Acceptances* ndorsements and other obligations
1his refers to the bills accepted by the bank or endorsed by the bank on behalf of its
custo)er. 1his is a contingent liability+ since if the person for .ho) the bank stands as a
guarantor+ dishonours the pay)ents+ the acceptance beco)es as actual liability. 1his is not a
trial balance ite). Lo.ever+ even if given in trail balance+ It .ill be found .ith both debit
and credit balance. 1his )ust be sho.n under &chedule 22 3OContingent liabilitiesP.
+A. Money at )all and Short $otice
1his consists of loans (a) at call and (b) at short notice. 1hese loans are given to fill
brokers+ stock stockers and other banks for a short period. Fhen the banks have surplus
)oney .ith the)+ they advances their surplus to another banker under this category. $t any
ti)e+ or by giving a short notice+ the )oney .ill be repaid by the borro.er. 1he rate of
interest .ill depend on current )oney )arket condition. 1his lender is sho.n as the asset
side of the !alance &heet under &chedule = B O!alance .ith banks and )oney at call and
short notice.P
+C. $on ; "erforming Assets
!anks advances can be classified as perfor)ing assets and non3perfor)ing assets (I#$). $n
assets beco)es non3perfor)ing .hen inco)e for) it is not received in the bank for a certain
period. 1he R!I has issued certain guidelines to banks regarding classification of advances
into perfor)ing and non3perfor)ing assets. 1he I#$ is defined as any credit facility in
respect to .hich interest re)ained unpaid for a period of four 0uarters during the year ending
42
st
7arch+ 2;;4+ three 0uarters during the ending 2;;6+ and t.o 0uarters during the year
ending 42
st
7ach 2;;9 on .ards.
)LASS!F!)A#!O$ OF BA$' A3%A$)S
!ank advances are broadly classified into four groups:
2. &tandard assets
2. &ub = &tandard $ssets
4. (oubtful assets and
6. %oss $ssets
1he classification is done after taken into consideration the extent of dependence on
the collateral security for realiCation to dues the degree of .ell defined credit .eakness.
+. Standard Assets
1hose assets .hich do not cause any proble) and do not carry )ore than nor)al risk
attached to the business are called standard assets.
9. Sub ; Standard Assets
Fhere Install)ents of ter) loans are overdue for a period exceeding one year should
be treated as sub3standard assets. Fhere ter) of loan agree)ent regarding interest and
principal are rescheduled after co))ence)ent of production should be classified as sub3
standard and should re)ain in such category at least for t.o years of satisfactory
perfor)ance under the rescheduled ter)s. 1hus+ an asset .hich has re)ained as I#$ for less
than t.o years is also classified as sub3standard assets.
1he bank should )ake provision of 2:? the total outstanding against sub3standard
assets.
:. 3oubtful Assets
Fhere install)ents of ter) loans are overdue for a period exceeding t.o years )ust
be treated as doubtful assets.
1he bank )ust )ake provision for doubtful debts as follo.s:
(a) 2::? of the extent of .hich the advance is not covered by the realiCable value of
the security in the possession of the bank. 1he reasonable value is esti)ated on
realistic basis.
(b) /ver and above the) (i) above+ depending on the period for .hich the assets
re)ained doubtful+ 2:? to 9:? of the secured position. 1he realiCable value of
outstanding is esti)ated at upto one year+ 2:? of provision+ are to three years+
4:? of provision and )ore than three years+ 9:? of provision.
-. Loss Assets
Fhen the loss on an asset is identified by the bank but the a)ount has not been
.ritten off .holly or partly is kno.n as loss assets. &uch as asset is uncollectable and is of
such little value that it is not desirable to sho. it as banks in assets though it )ay have so)e
salvage or recovery value.
1he banks should )ake provisions against loss assets as follo.s.
1he entire assets should be .ritten off. If the assets are to re)ain in the books for any
reason+ then 2::? of the outstanding should be provided.
'ey "oints to be remembered in preparation of final accounts of Banking )ompanies.
2. Fhen trial balance is not given in the proble)+ it is advisable to prepare trial balance
before preparation of final accounts.
2. Fhen trial balance sho.s any difference (i.e. if the credit and debit totals of trial
balance does not tally)+ the balance should be sho.n in !alance &heet. Fhen credit
colu)n of trial balance is )ore+ the difference in trial balance should be sho.n under
schedule 93 O/ther %iabilities and #rovisionsP and .hen debit colu)n of trial balance
is )ore+ the difference in trial balance should be sho.n under &chedule 22 = O/ther
$ssetsP.
4. !efore preparation of #rofit and %oss $5c+ and !alance &heet+ identify the
ad*ust)ents given for ite)s in trial balance and )ark the ad*ust)ent nu)ber+ next to
the respective ite) in trial balance+ for easy identification .hile solving the proble).
6. 8eep ready the for)ats of #rofit and %oss $5c and !alance &heet (.ith &chedule
Iu)bers)+ along .ith &chedules. &chedules need not be co)pletely .ritten. 8eep
ready till the schedules only .ith their nu)bers and headings.
9. !egin .ith ite)s in trial balance = re)e)ber+ each ite) in trial balance appears only
once. Identify the schedule under .hich the ite) has to appear+ and enter the ite)
under the schedule.
<. Fhen the ite) has any ad*ust)ent+ it has to appear t.ice. $gain+ identify the t.o
schedules in .hich the ite) has to be ad*usted and enter the) under the respective
schedules.
B. $fter all ite)s in trial balance are entered+ check if any ad*ust)ents are yet to be
considered. If so sho. the entries for the ad*ust)ents in the relevant schedules.
>. /n co)pletion of all entries+ close the schedules pertaining to #rofit and %oss $5c and
transfer the balances to #E% $5c.
;. Close #rofit and %oss $5c and transfer the relevant balances to relevant schedules.
2:. Close the other schedules and transfer the relevant balances to relevant schedules.
22. ,nter the difference+ if any+ in trial balance under the relevant head. Fith this+ the
!alance &heet )ust tally.
22. Fhile solving the proble) in exa)s+ it is not 7andatory to sho. all schedules.
Lence+ only those schedules under .hich ite)s in the proble) .ould appear should
be prepared.
24. 1he colu)n relating to O#revious QearP figures can be excluded in final accounts and
also in schedules+ for .orking purposes.

!llustration -0"roblem of "rofit and Loss Account1
'ro) the follo.ing particulars+ prepare profit and loss account of 8rishna !ank %td.
for 2;;;32:::.
Rs.
Interest on loans 46+;::
Interest on fixed deposits 4<+9::
Rebate on bills discounted 6+>::
Co))ission charged on custo)ers ;2:
/ffice expenses 29+9::
(iscount on cash credits 2;+6::
Interest on cash credits 22+6::
!alance of profit E loss a5c 2+2::
Rent and taxes 2+>::
Interest on overdraft 22+>::
(irectors Re)uneration 62:
Interest on savings deposits accounts <+;::
#ostal expenses 29:
#rinting and stationery 4;:
/ther expenses 2>:
Solutions: 8
Schedule +:: !nterest arned
I. Interest and discount (46+;::R2;+6::R22+6::R22+>::36+>::) >6+B::
II. Interest on invest)ents 3
III. Interest on R!I deposits 3
IG. /thers 3
#otal C-*ADD
Schedule +-: Other !ncomes
!. Co))issions+ !rokerage and ,xchange ;2:
!!. #rofit on sale of invest)ents 3
!!!. #rofit on revaluation of invest)ents 3
!%. #rofit on sale of assets 3
%. Inco)e by .ay of foreign exchange 3
%!. Inco)e by .ay of dividend on invest)ents 3
%!!. /thers 3
#otal ,+D
Schedule +>: !nterest Epended
!. Interest on deposits (4<+9:: R <+;::) 64+6::
!!. Interest on borro.ings 3
!!!. /thers 3
#otal -:*-DD
Schedule +@: Operating Epenses
!. &alaries 2+>::
!!. Rent+ rates+ taxes and lighting 4;:
!!!. #rinting and stationary 3
!%. $dvertise)ent and publicity 3
%. (epreciation 62:
%!. (irectors fees 3
%!!. $udit fees 3
%!!!. %a. charges 29:
!4. #ostage+ telegra) and telephone 3
4. Repairs and )aintenance 3
4!. Insurance 3
4!!. /thers expenses (2>:R29+9::) 29+<>:
#otal +C*--D
"ro/isions and )ontingencies 8
#otal 8
'rishna Bank Ltd.
"rofit G Loss Account for the Bear nded
"articulars
Schedule
number
Amount 0Rs.1
!ncomes:
Interest earned 24 >6+B::
/ther inco)es 26 ;2:
#otal C>*@+D
Ependiture:
Interest expended 64+6::
/perating expenses 2>+66:
#rovisions and contingencies
#otal @+*C-D
"rofit G Loss:
#rofits for the year 24+BB:
#rofits b5d 2+2::
#otal 9-*,AD
Appropriations:
1ransfer to &tatutory Reserve (24+B:x29?) 9+;62
1ransfer to other Reserve 3
1ransfer to Govern)ent or proposed dividend 3
#rofits c5d 2;+:2>
#otal 9-*,AD
!llustration >0"roblem of "rofit and Loss Account1
'ro) the follo.ing particulars+ prepare profit and loss account of %aksh)i !ank %td.
for the year ended
Rs.
Interest on loans 2+9;+:::
Interest on fixed deposits 2+B9+:::
Rebate on bills discounted 6;+:::
Co))ission charged on custo)ers >+2::
,stablish)ent expenses 96+:::
(iscount on bills discounted 2+;9+:::
Interest on cash credits 2+24+:::
Interest on current account 62+:::
Rent and taxes 2>+:::
Interest on overdraft 96+:::
(irectors and audit fees 6+2::
Interest on savings bank deposits <>+:::
#ostal and telegra)s 2+6::
#rinting and advertise)ent 2+;::
&undry charges 2+B::
Solutions: 8
I. Interest and discount (2+2;+:::R2+24+:::R96+:::R2+;9+:::3
6;+:::)
<+>2+:::
IG. /thers 3
#otal @*C9*DDD
!. Co))issions+ !rokerage and ,xchange >+2::
!%. #rofit on sale of assets 3
%!!. /thers 3
#otal C*9DD
!. Interest on deposits (2+B9+:::R62+:::R<>+:::) 4+>9+:::
!!!. /thers 3
#otal :*C>*DDD
!. &alaries 3
!!. Rent+ rates+ taxes and lighting 2>+:::
!!!. #rinting and stationary 2+;::
%. (epreciation 3
%!. (irectors fees 6+2::
%!!. $udit fees 3
%!!!. %a. charges 3
!4. #ostage and telegra) 2+6::
4!. Insurance 3
4!!. /thers expenses (96+:::R2+B::) 99+B::
#otal C9*9DD
#otal 8
'rishna Bank Ltd.
"rofit G Loss Account for the Bear nded
"articulars
Schedule
number
Amount 0Rs.1
!ncomes:
Interest earned 24 <+>2+:::
/ther inco)es 26 >+2:::
#otal @*,D*9DD
Ependiture:
Interest expended 29 4+>9+:::
/perating expenses 2< >2+2::
#otal -*@A*9DD
"rofit G Loss:
#rofits for the year 2+24+2::
#rofits b5d 3
#otal 9*9:*9DD
Appropriations:
1ransfer to &tatutory S 29? 99+B::
#rofits c5d 2+<B+29:
#otal 9*9:*DDD
!llustration @0"roblem of "rofit and Loss Account1
'ro) the follo.ing particulars+ prepare profit and loss account of 1ri)urthy !ank %td
for the year ended 423:432::2.
Rs.
Interest on loans 29+;:+:::
Interest on fixed deposits 2B+9:+:::
Co))ission >2+:::
,stablish)ent charges 9+:6+:::
Interest on cash credits 22+4:+:::
Interest on current account 62+:::
(iscount on bills discounted 26+<:+:::
Interest on current and savings deposits 22+::+:::
Rent and taxes 2+>:+:::
Interest on overdrafts 29+6:+:::
(irectors fees 4:+:::
$udit 'ees 22+:::
#ostal and telegra)s 26+:::
#rinting and &tationary 2;+:::
&undry charges 2B+:::
!ad debts to be .ritten off a)ounted to Rs. 6+::+:::. provide for taxation at 99?.
Rebate on bills discounted Rs. 6:+:::.

Solutions: 8
I. Interest and discount
(2+9;+:::R22+4:+:::R26+<:+:::R29+6:+:::36:+:::)
BB+>:+:::
IG. /thers 3
#otal A*CD*DDD
!. Co))issions+ !rokerage and ,xchange >2+:::
!!!. #rofit on revaluation 3
!%. #rofit on sale of others assets 3
%!!. /thers 3
#otal C9*DDD
!. Interest on deposits (2B+9:+:::R22+::+:::) 4>+9:+:::
!!!. /thers 3
#otal :C*>D*DDD
!. #ay)ent to e)ployee 3
!!. Rent+ rates and lighting 2+>:+:::
!!!. #rinting and stationary 2;+:::
%. (epreciation 4:+:::
%!. (irectors fees 22+:::
%!!. $udit fees 3
%!!!. %egal charges 26+:::
!4. #ostage and telegra) 3
4!. Insurance 3
4!!. /thers (,stablish)ent charges E &undry charges)
(9+6:+:::R2B+:::)
9+9B+:::
#otal C*99*DDD
(i) !ad debts .ritten off 6+::+:::
(ii) #rovision for taxation 29+46+9::
#otal +,*:-*>DD
#rimurthy Bank Ltd.
"rofit G Loss Account for the Bear nded :+8D:89DD+
"articulars
Schedule
number
Amount 0Rs.1
!ncomes:
Interest earned 24 BB+>:+:::
/ther inco)es 26 >2+:::
#otal AC*@9*DDD
Ependiture:
Interest expended 29 4>+9:+:::
/perating expenses 2< >+22+:::
#rovisions and Contingencies 2;+46+9::
#otal @@*D@*>DD
"rofit G Loss:
#rofits for the year 22+99+9::
#rofits b5d 3
#otal +9*>>*>DD
Appropriations:
1ransfer to &tatutory (22+99+:::x29?) 4+24+>B9
#rofits c5d ;+62+<29
#otal +9*>>*>DD
!llustration A0"roblem of "rofit and Loss Account1
'ro) the follo.ing particulars+ prepare profit and loss account of 7ysore !ank %td
for the year ended 423:432::2.
Rs.
Interest on loans 92+>::
Interest on fixed deposits 99+>::
Co))ission received 2+<::
&alaries and allo.ances 2:+>::
(iscount on bills discounted 2;+2::
Rebate on bills discounted ;+>::
Interest on cash credit 66+<::
Interest on current accounts >+6::
Rent and taxes 4+<::
Interest on overdrafts 4:+>::2
(irectors fees <::
$udit 'ees 2::
Interest on &aving !ank deposits 24+<::
#ostal and telegra)s 4::
#rinting and &tationary <::
%ocker rent 2::
1ransfer fees 2::
(epreciation on !ank properties 2+:::
&undry charges 6::
Other !nformation:
(I) #rovision for bad debts Rs. >+:::
(II) #rovision for inco)e tax Rs. 4:+:::
Solutions: 8
I. Interest and discount (92+>::R2;+2::R66+<::R4:+>::3;+>::) 2+6<+<::
IG. /thers 3
#otal +*-@*@DD
!. Co))issions+ ,xchange and !rokerage 2+<::
%!!. /thers 4::
#otal +*,DD
!%. Interest on deposits (99+:::R>+6::R24+<::) BB+:::
%. Interest on borro.ings 3
%!. /thers 3
#otal AA*DDD
!. #ay)ent to e)ployee 2:+>::
!!. Rent+ rates+ taxes and lighting 4+<::
!!!. #rinting and stationary <::
%. (epreciation !anks property 2+:::
%!. (irectors fees <::
%!!. $udit fees 2::
%!!!. %a. charges 3
!4. #ostage+ telegra) E telephone 4::
4!. Insurance 3
4!!. /thers (sundry charges) 6::
#otal +A*>DD
(i) provision for !ad debts >+:::
(ii) #rovision for inco)e tax 4:+:::
#otal :C*DDD
Mysore Bank Ltd.
"rofit G Loss Account for the Bear nded :+8D:89DD+
"articulars
Schedule
number
Amount 0Rs.1
!ncomes:
Interest earned 24 2+6<+<::
/ther inco)es 26 2+;:::
#otal +*-C*>DD
Ependiture:
Interest expended 29 BB+:::
/perating expenses 2< 2B+9::
#rovisions and Contingencies 4>+:::
#otal +*:9*>DD
"rofit G Loss:
#rofits for the year 2<+:::
#rofits b5d 3
#otal +@*DDD
Appropriations:
1ransfer to &tatutory Reserve at 29? 6+:::
#rofits c5d 22+::::
#otal +@*DDD
!llustration C0"roblem of "rofit and Loss Account1
'ro) the follo.ing particulars+ prepare profit and loss account of Canara !ank %td
for 2:::32::2
Rs.
Interest on loans 49+:::
Interest on fixed deposits 4<+:::
Co))ission received 2+:::
/ffice expenses 29+:::
(iscount on bills discounted 2:+:::
Interest on cash credits 24+:::
!alance of profit5loss a5c 2+2::
Rent and taxes 2+>::
Interest on overdrafts 22+;::
(irectors re)uneration 69:
Interest on savings deposits B+:::
#ostal expenses 29:
#rinting and &tationary 6::
/ther expenses 2::
Solutions: 8
I. Interest and discount (49+:::R2:+:::R24+:::R22+;::) ;:+;::
IG. /thers 3
#otal ,D*,DD
!. Co))issions+ ,xchange and !rokerage 2+:::
!!!. #rofit on revaluation 3
%!!. /thers 3
#otal +*DDD
!. Interest on deposits (4<+:::RB+:::) 64+:::
!!!. /thers 3
#otal -:*DDD
!. #ay)ent to e)ployee 3
!!. Rent+ rates and lighting 2+>::
!!!. #rinting and stationary 6::
%. (epreciation 3
%!. (irectors fees 69:
%!!. $udit fees 3
%!!!. %egal charges 3
!4. #ostage and telegra) 29:
4!. Insurance 3
4!!. /thers (,stablish)ent charges E &undry charges)
(9+6:+:::R2B+:::)
29+2::
#otal +C*DDD
#otal 8
)anara Bank Ltd.
"rofit G Loss Account for the Bear nded 9DDD89DD+
"articulars
Schedule
number
Amount 0Rs.1
!ncomes:
Interest earned 24 ;:+;::
/ther inco)es 26 2+:::
#otal ,+*,DD
Ependiture:
Interest expended 29 64+:::
/perating expenses 2< 2>+:::
#rovisions and Contingencies 3
#otal @+*DDD
"rofit G Loss:
#rofits for the year 4:+;::
#rofits b5d 2+2::
#otal :9*+DD
Appropriations:
1ransfer to &tatutory Reserve at 29? (4:+;::x29?) B+B29
#rofits c5d 26+4B9
#otal :9*+DD
!llustration ++0"roblem of "rofit and Loss Account1
'ro) the follo.ing infor)ation+ your are re0uired to prepare the profit and loss
account of #.I.!ank for the year ended 42.:4.2;;> under the provisions of the act applicable
thereto.
Rs. (in K:::)
Interest on loans 92>
Interest on cash credit 66<
(iscount on bills discounted 4;:
Interest on overdraft 2:>
Interest on savings bank deposit 22:
Interest on fixed deposits 996
Co))ission+ ,xchange and brokerage 2<.6
Rent+ taxes and lighting 4<
$uditors fees 2.6
#ostage+ telegra) and telephones 2.>
&undry charges 2
$dvertise)ent and publicity 2.6
(irector fess <
#rinting and stationery :.6
%a. charges 2.6
#ay)ent to e)ployees 2:>
%ocker rent :.B
1ransfer fees 2.6
(epreciation on !anks property 2:
Supplementary !nformation:
(i) Rebate on bills discounted Rs. ;+>::
(ii) #rovide for bad debts Rs. 9>+:::
Solutions: 8
I. Interest and discount (92>R66<R4;:R2:>3;>) 2+4<6
IG. /thers 3
#otal +*:@-
!. Co))issions+ !rokerage and ,xchange 2<.6
%!!. /thers (transfer fees and locker rent) (2.6R:.B) 2.2
#otal +C.>
!. Interest on deposits (22:R996) BB6
!!!. /thers 3
#otal AA-
!. &alaries 2:>
!!. Rent+ rates and lighting 4<
!!!. #rinting and stationary :.6
!%. $dvertise)ent and publicity 2.6
%. (epreciation 2:
%!. (irectors fees <
%!!. $udit fees 2.6
%!!!. %a. charges 2.6
!4. #ostage and telegra) 2.>
4!. Insurance 3
4!!. /thers 2.:
#otal +AD.-
Bad debts >C
#otal >C
".$. Bank
"rofit G Loss Account for the Bear nded :+.D:.+,,C
"articulars
Schedule
number
Amount 0Rs.1
!ncomes:
Interest earned 24 2+4<6
/ther inco)es 26 2>.9:
#otal +*:C9.>D
Ependiture:
Interest expended 29 BB6
/perating expenses 2< 2B:.6
#rovisions and Contingencies 9>
#otal +*DD9.-
"rofit G Loss:
#rofits for the year 4>:.2
#rofits b5d 3
#otal :CD.+
Appropriations:
1ransfer to &tatutory Reserve at 29? (4:+;::x29?) ;9
#rofits c5d 2>9.2
#otal :CD.+
!llustration +- 0"reparation of Balance Sheet1
1he follo.ing balances have been taken fro) the books of Indian !anking Corporation on
42
st
7arch+ 2::2.
Rs. Rs.
#aid up capital 2:+::+::: 'urniture 2:+:::
%ocal bills discounted ;+::+::: 'ixed deposits 2:+::+:::
Reserve fund 4+>9+::: #rofit E loss a5c balance (Cr) 2+2:+:::
%oans+ advances 26+::+::: &ta)ps on hand 9+:::
Hnpaid dividend 9+::: Cash balance 2+9:+:::
/verdrafts 24+::+::: Cash balance .ith other banks <+9:+:::
Current and savings deposits 29+::+::: Invest)ents (Cost) 6+B9+:::
1he directors of the bank have instructed that the invest)ent should be sho.n in the !alance
&heet at the 7arket Galue of Rs. 9+29+:::
1he authoriCed capital of the !ank .ar Rs. 22+::+::: in Rs. 2: &hares.
#repare the balance sheet of the bank+ as on 42
st
7arch 2::2
Form A
!ndian Banking )orporation
Balance Sheet as on :+
st
March* 9DD9
Schedule
number
Bear ended
:+8D:89DD9 Rs.
)apital and Liabilities
Capita 2 2:+::+:::
Reserves and &urplus 2 9+69+:::
(eposits 4 69+::+:::
!orro.ings 6 3
/ther liabilities and provisions 9 9+:::
#otal @D*>D*DDD
Assets
Cash and balances .ith Reserve !ank of India < 2+9:+:::
!alances .ith banks and )oney at call and short notice B <+9:+:::
Invest)ents > 9+29+:::
$dvances ; 6<+::+:::
'ixed assets 2: 2:+:::
/ther assets 22 9+:::
#otal @D*>D*DDD
Contingent %iabilities 22 II%
$s on 423:43
2::2 Rs.
Schedule + ; )apital
$uthorised capital
2+2:+::: shares of Rs. 2: each 22+::+:::
#aid up capital
2+::+::: shares of Rs. 2: each 2:+::+:::
#otal +D*DD*DDD
Schedule 9 ; Reser/es and Surplus
Reserve 'und 4+>9+:::
#rofit and %oss account 2+2:+:::
Invest)ent reserve (Rs. 9+29+::: = Rs. 6+B9+:::) 9:+:::
#otal >*->*DDD
Schedule : ; 3eposits
Current and savings deposits 29+::+:::
'ixed deposits 2:+::+:::
#otal ->*DD*DDD
Schedule - ; Borro=ings $!L
Schedule > ; other liabilities and pro/isions
(npaid di/idend 9+:::
#otal 9+:::
Schedule @ ; cash and balance =ith reser/e bank of !ndia 9*>D*DDD
Schedule A ; Balance =ith other Banks and money
at call and Short notice
Cash balance .ith other banks <+9:+:::
Schedule C ; !n/estments
Invest)ent at cost 6+B9+:::
$dd: Increase in the value of invest)ents 9:+::: 9+29+:::
#otal >*9>*DDD
Schedule , ; Ad/ances
%ocal bills discounted ;+::+:::
%oans and advances 26+::+:::
/verdrafts 24+::+:::
#otal -@*DD*DDD
Schedule +D ; FiEed Assets
'urniture 2:+:::
#otal 9D*DDD
Schedule ++ ; Other Assets
&ta)ps on hand 9+:::
Schedule +9 ; )ontingent Liabilities $!L
!llustration +> 0"reparation of Balance Sheet1
1he follo.ing balances+ prepare the !alance &heet of %ucky !ank %td.+ as on 42.:4.2::2
Rs. Rs.
&hare capital (2+::: shares) 2+::+::: 7oney at call ;+::+:::
#re)ises 2+::+::: #rofit and %oss $5c (Cr.) 69+:::
Rebate on !ills discounted 9+::: Invest)ents B+::+:::
1ravellers Che0ue 2+::+::: !ills #urchased 29+::+:::
(eposits 9<+::+::: $cceptances for custo)ers 9+::+:::
%oans 22+::+::: !ills for collection 6+::+:::
Reserves 4+::+::: (epreciation fund on pre)ises 2:+:::
Cash in hand 4:+::: Cash .ith R!I 9+2:+:::
Cash .ith other banks 6+9:+::: #ension 'und 6:+:::
1he follo.ing .ere co)pletely o)itted .hile the above balances .ere calculated. 1hey
should be ad*usted suitably.
2. 1ravellers Che0ue paid Rs. 2:+:::
2. 7oney at call recovered Rs. 2:+:::
Solution:
Form A
Lucky Bank Limited
Balance Sheet as on :+
st
March* 9DD9
Schedule
number
Bear ended
:+8D:89DD9 Rs.
Capita 2 2+::+:::
Reserves and &urplus 2 4+69+:::
(eposits 4 9<+::+:::
!orro.ings 6 3
/ther liabilities and provisions 9 2+49+:::
#otal @:*CD*DDD
Assets
Cash and balances .ith Reserve !ank of India < 9+<:+:::
!alances .ith banks and )oney at call and short notice B 24+4:+:::
Invest)ents > B+::+:::
$dvances ; 4B+::+:::
'ixed assets 2: ;:+:::
/ther assets 22 3
#otal @:*CD*DDD
Contingent %iabilities 22 >*DD*DDD
!ills for collection -*DD*DDD
$s on 423:43
2::2 Rs.
2:+::: shares of Rs. 2:: each 2+::+:::
Reserves 4+::+:::
#rofit and %oss account 69+:::
#otal :*->*DDD
(eposits 9<+::+:::
Schedule > ; Other liabilities and pro/isions
!ills payable
1ravellers Che0ue 2+::+:::
%ess: #aid 2:+:::: 2+;:+:::
Rebate on !ills 9+:::
#ension 'und 6:+:::
#otal 9*:>*DDD
Schedule @ ; cash and balance =ith reser/e bank of !ndia
7oney at call received 2:+:::
Cash in hand 4:+:::
%ess: 1ravellers Che0ue #aid (3) 2:+::: 6:+:::
Cash .ith Reserve !ank of India 9+2:+:::
#otal >*@D*DDD
Schedule A ; balance =ith banks and money at call and short notice
7oney at call and short notice ;+::+:::
%ess: 7oney at call recovered 2:+::: >+>:+:::
Cash .ith Reserve !ank of India 6+9:+:::
#otal +:*:D*DDD
Schedule C ; !n/estments A*DD*DDD
Schedule , ; ad/ance
%oan 22+::+:::
!ills purchased 29+::+:::
#otal :A*DD*DDD
Schedule +D ; fiEed assets
#re)ises 2+::+:::
%ess: (epreciation 'und 2:+::: ;:+:::
#otal ,D*DDD
Schedule ++ ; Other Assets $!L
Schedule +9 ; contingent liabilities
$cceptances for custo)ers 9+::+:::
!llustration 9A
'ro) the follo.ing infor)ation relating to %aksh)i Co))ercial !ank %td.+ prepare
the #rofit and %oss $ccount and the !alance &heet as at the end of the 'inancial year 2:: =
:2 in the appropriate for):
Rs.
&hare capital 2+::+:::
&hares of Rs. 2:: each full paid 2+2:+:::
&tatutory Reserve 'und ('ully invested in 9? Govern)ent &ecurities at par) 22+>B9
!ad debts 2+2B+B29
,stablish)ent expenses 24+<9+22B
Current deposits B+6>+66:
Interest paid 2B+2:+:::
&avings account 6B+9::
$cceptance for custo)ers 6+;9+:::
(iscount >+2:+6::
#rofit and loss account (Cr) (2.6.2:::) >+B9+:::
'ixed deposits 2+;2+;::
Co))ission and exchange 6+>:+:::
#re)ises 22+<9:
Cash in hand 22+><+6::
Interest received ;2+9::
Invest)ents in shares ()arket value Rs. 2+::+:::)
Qear ended
423:432::2 Rs.
Schedule + ; )apital 2+::+:::
&tatutory Reserves
/pening !alance 2+2:+:::
$dditions during the year 96+9:4 2+B6+9:4
!alance in profit and loss a5c (fro) appropriate a5c) ;+<4+;:;
#otal ++*:C*-+9
Current (eposits 24+<9+22B
&avings account 2B+2:+:::
'ixed deposits >+B9+:::
#otal :,*@D*99A
Hnexpired discount 6>+:::
#rovision for (oubtful debts >+:::
#rovision for 1axation (9952:: x >+2:+6::) 6+92+22:
$dd: &urcharge 952:: x 6+92+22: 22+9<2 6+B4+B>2
#otal >*9,*AC+
Cash in hand 22+<9:
Schedule A ; balance =ith banks and money at call and short notice
Cash .ith !anks in India 2+>6+9::
Schedule C ; !n/estments ;2+9::
9? Govern)ent &ecurities 2+2:+:::
#otal 9*+9*>DD
1er) %oan in India 2:+::+:::
Cash credit hypothecation in India 22+9<+:::
!ills purchased 2<+::+:::
%oans to ,)ployees 6:+BB:
#otal :C*,@*AAD
Schedule +D ; FiEed assets
#re)ises 6+>:+:::
(ifference in 1rail balance ;+42+:::
Schedule +9 ; )ontingent Liabilities
$cceptance for custo)ers 6B+9::
#otal -A*>DD
Schedule +: ; !nterest arned
Interest Received 22+><+6::
(iscount 6+;9+:::
#otal +A*C+*-DD
Schedule +- ; Other !ncome
Co))ission and ,xchange 2+;2+;::
(ividend on Invest)ent >+::: 4+::+;::
Schedule +> ; !nterest Epended
Interest #aid B+6>+66:
Schedule +@ ; Operating Epenses
!ad (ebts 22+>B9
,stablish)ent ,xpenses 2+2B+B29
&alaries ,tc: 6>+:::
Chief ,xecutive re)uneration 4+;B+6<B 6+69+6<B
#otal >*CA*D@A
$ote: "ro/ision and )ontingencies
#rovision for doubtful debts >+:::
#rovision for taxation (6+92+22: R 22+9<2) 6+B4+B>2
Hnexpired (iscount 6>+:::
#otal >*9,*AC+
!llustration 9C 0"rofit and Loss Account and Balance Sheet1
'ro) the follo.ing balances of Ginayaka !ank %td.+ !angalore as on 42
st
7arch 2::2.
prepare the profit and loss account for the year ended 42
st
7arch 2::2 and a !alance &heet as
on that date.
Rs.
,0uity &hare capital in Rs. 2:: &hares 2:+::+:::
#rofit and loss a5c as on 23632::: >:+<<<
Current account deposits <>+29+<9>
'ixed deposit accounts BB+;2+2:>
&avings banks deposits 92+4<+:::
(irectors fees ;+;<:
$udit fees 2+:::
'urniture (Cost Rs. 2+::+:::) B6+9<:
Interest and (iscount 6+2:+6<<
Co))ission and exchange 2+:6+:::
Invest)ent Reserve 'und B:+:::
!ranch $d*ust)ents (Cr.) ;4+B>>
#ostage and 1elegra)s 2+422
#rinting and &tationery <+B>:
Rent and 1axes 2B+:26
#rovident fund contribution 2:+:::
&alaries and allo.ance 2+:6+4::
!uilding (Cost Rs. <+::+:::) 6+2:+:::
%a. charges 4+4::
Cash in hand and .ith R!I 2<+42+<6>
Cash .ith other !anks 26+2:+29:
%oans cash credits and overdrafts 2+6:+::+:::
!ills discounted 2>+:2+:6:
Hnexpired insurance >B6
&ta)ps in hand 4B>
&tatutory Reserve 'und 2+4:+:::
Reserve 'und 6+::+:::
Contingency Reserve 2+::+:::
Invest)ents. 2B+9<+29:
Additional !nformation: 8
(2) 1he authorised capital consists of 6:+::: e0uity shares of Rs. 2:: each all of .hich
have been subscribed but only 9:? has been called up.
(2) 1he bank has accepted Rs. 6+::+::: .orth bills on behalf of custo)ers the securities
lodged against .hich a)ount to Rs. <+::+:::
(4) #rovide depreciation on !uildings Rs. 2<+::: and on furniture Rs. B+:::. #rovide
for doubtful debts Rs. 4+;>:.
(6) Rebate on bills discounted to Rs. 22+>::
(9) 1he 7arket value of Invest)ents a)ount to Rs. 2B+::+:::. &ho. invest)ent of its
)arket value.
Solution: 8
Balance Sheet of Srinidhi Bank Ltd. as on :+.:.9DD:
Schedule
number
Amount 0Rs.1
Capital 2 2:+::+:::
Reserves and &urplus 2 22+66+62<
(eposits 4 2+;B+92+B<<
!orro.ings 6 Iil
/ther %iabilities and #rovisions 9 2+:9+9>>
#otal 9*:D*D9*AAD
Assets
Cash in Land and .ith R!I < 2<+42+<6>
Cash .ith other banks and )oney at call and short notice B 26+2:+29:
Invest)ents (cost 2B+9<+29:) > 2B+::+:::
$dvances ; 2+<B+;B+:<:
'ixed assets 2: 6+<2+9<:
/ther assets 22 2+292
#otal 9*:D*D9*AAD
Contingent and provisions 22 6+::+:::
"rofit and Loss Account for the Bear nded :+.:.9DD+
"articulars
Schedule
$umber
Amount
0Rs.1
!ncome:
Interest earned 24 6+:>+<6<
/ther inco)es 26 2+:6+:::
#otal @*+9*@-@
Ependiture:
Interest ,xpended 29 Iil
/perating ,xpenses 2< 2+>>+<<<
#rovisions and Contingencies 4+;>:
#otal +*,9*@-@
"rofit G Loss:
#rofits b5d >:+<<<
Iet profit for the year (I = II) 6+2:+:::
#otal >*DD*@@@
Appropriations:
&tatutory Reserve (29? of 6+2:+:::) 2+:9+:::
&pecial Reserve 3
Govern)ent 3
/thers 3
#rofits and loss (!al. 'ig) 4+;9+<<<
#otal >*DD*@@@
Qear ended
423:432::2 Rs.
,0uity share capital in Rs. 2:: shares 2:+::+:::
2. &tatutory Reserves sec. 2B (2+4:+::: R 2+:9+:::) 2+49+:::
$ddition during the year
2. Re/enue and other Reser/es:
Contingency Reserve 2+::+:::
Invest)ent Reserve 'und (B:+::: = 9<+29:) 24+B9:
# E % a5c 4+;9+<<<
#otal ++*--*-+@
Current (eposits <>+29+<9>
'ixed (eposits account BB+;2+2:>
&avings !anks $ccounts 92+4<+:::
#otal +*,A*>9*A@@
!.# 3
Rebate 22+>::
!ranch $ds ;4+B>
#otal +*D>*>CC
Schedule @ ; cash and balance =ith reser/e bank of !ndia +@*:9*@-C
Schedule A ; balance =ith banks and money at call and short notice 9-*+D*9>D
Invest)ent at 7arket Galue 2B+::+:::
2. !ills (iscounted and purchased 2>+:2+:6:
2. Cash Credit overdraft and loans pay other de)and 2+4;+;<+:2:
#otal +*@A*,A*D@D
#re)ises at cost <+::+:::
(3) (epreciation upto the date 2+:<+:::
4+;6+:::
'urniture at cost 2+::+:::
(3) (epreciation upton to date 42+6::
<B+9<:
#otal -*@+*>@D
Hnexpired insurance >B6
&ta)ps in hand 4B>
#otal +*9>9
!ills accepted on behalf of custo)ers 6+::+:::
Schedule +: ; !nterest balanced
Interest and discount 6+2:+6<<
%ess: Rebate on bills discounted 22+>::
#otal -*DC*@-@
Co))ission and ,xchange 2+:6+:::
Schedule +> ; Operating Epenses
2. #ay)ent to and provision for e)ployees 2+26+4::
2. Rent+ 1axes and %ighting 2B+:26
4. #rinting and stationary <+B>:
6. $dvertise)ents and publicity 3
9. (epreciation on !anks property 24+:::
<. (irectors fees and allo.ances ;+;<:
B. $uditors fees and allo.ances 2+:::
>. %a. Charges 4+4::
;. #ostage+ 1elegra)s and 1elephones 2+422
2:. Repairs and 7aintenances 3
22. Insurance 3
22. General ,xpenses 3
#otal +*CC*@@@
!llustration 9, 0"roblem on profit and loss account and balance sheet1
'ollo.ing is the trial balance of Felco)e !ank %td. as on 42.:4.2::2
3ebit )redit
&ubscribed capital (9:+::: shares of Rs. 2:) 2:+::+:::
%oan and cash credits 2;+B:+:::
#re)ises 2+::+:::
Indian govern)ent securities <+::+:::
Current deposits 22+::+:::
'ixed deposits 2+9:+:::
&avings bank deposits 2+::+:::
&alaries 9<+:::
General expenses 96+>::
Rent and taxes 6+<::
(irector fees 4+<::
#rofit and loss a5c 2.6.2::2 42+:::
Interest and discount 2+9<+:::
1elegraphic transfer 2+::+:::
Circular note 9:+:::
!ranch ad*ust)ents 9:+:::
&tock of stationery 2B+:::
!ills purchased and discounted ;2+:::
Interi) dividend paid 46+:::
Recurring deposits 6:+:::
&hares 2+::+:::
Cash in hand and R!I 2+><+:::
7oney at call and short notice 2+<:+:::
-:*AC*DDD -:*AC*DDD
Ad?ustments:
a) #rovide for doubtful debts 9+:::
b) Interest accrued on invest)ents >+:::
c) Hnexpired discount 4>:
d) ,ndorse)ent on behalf of custo)ers 2+29+:::
e) #re)ises added during the year 2:+:::
(epreciation pre)ises at 9? on opening balance. #repare bank final accounts.
<elcome Bank Ltd
Balance Sheet as on :+.:.9DD9
Schedule
number
Amount 0Rs.1
Capital 2 2:+::+:::
Reserves and &urplus 2 6+44+<2:
(eposits 4 29+;:+:::
!orro.ings 6 3
/ther %iabilities and #rovisions 9 2+:9+4>:
#otal -9*9,*DDD
Assets
Cash and balance .ith Reserve !ank < 2+><+:::
!alance .ith banks and )oney at call and short notice B 2+<:+:::
Invest)ents > B+::+:::
$dvances ; 4:+<2+:::
'ixed assets 2: ;<+:::
/ther assets 22 29+:::
#otal -9*9,*DDD
Contingent liabilities 22 2+29+:::
<elcome Bank Ltd..
"rofit and Loss Account for the Bear nded :+.:.9DD9
"articulars
Schedule
$umber
Amount
0Rs.1
!ncome:
Interest earned 24 2+99+<2:
/ther inco)es 26 >+:::
#otal 9*@:*@9D
Ependiture:
Interest ,xpended 29 3
/perating ,xpenses 2< 2+24+:::
#rovisions and Contingencies 9+:::
#otal +*9C*DDD
"rofit G Loss:
#rofits b5d 42+:::
Iet profit for the year (I = II) 2+49+<2:
#otal +*@A*@9D
Appropriations:
&tatutory Reserve (sec. 2B) (246<2: x 2:?) 44+;:9
Interi) (ividend 46+:::
/thers ;;+B29
#rofits and loss c5d +*@A*@9D
Iotes on account +A 8
Qear ended
423:432::2 Rs.
&ubscribed Capital (9:+::: shares of Rs. 2:) 2:+::+:::
+D*DD*DDD
&tatutory Reserve 44+;:9
#rofit and loss a5c ;;+B29
-*::*@9D
Current (eposits 22+::+:::
'ixed (eposits account 2+9:+:::
&avings !anks $ccounts 2+::+:::
Recurring (eposits 6:+:::
#otal 9>*,D*DDD
!ranch advance 9:+:::
1elephone 1ransfer 2+::+:::
Circular Iote 9:+:::
Rebate on !ills 4>:
#ro : for (( 9::
#otal 9*D>*:CD
Schedule @ ; cash and balance =ith reser/e bank of !ndia +*C@*DDD
Schedule A ; balance =ith banks and money at call and short notice +*@D*DDD
Indian Govt &ecurities <+::+:::
&hares 2+::+:::
#otal A*DD*DDD
%oans and cash credits 2;+B:+:::
!ills purchased and discounted ;2+:::
#otal :D*@9*DDD
#re)ises 2+::+:::
(3) (epreciation 6+:::
#otal ,@*DDD
&tock of &tationary 2B+:::
Interest $ccrued on Invest)ent >+:::
#otal 9>*DDD
,ndorse)ent on behalf of custo)ers 2+29+:::
#otal +*+>*DDD
Schedule +: ; !nterest 7 3iscount
Interest and discount 2+9<+:::
%ess: Hnexpired discount 4>:
#otal 9*>>*@9D
Interest accrued on Invest)ents >+:::
#otal C*DDD
Schedule +> ; Operating Epenses
Interest paid Iil
&alaries 9<+:::
General ,xp 96+>::
Rent and 1axes 6+<::
(irectors 'ees 4+<::
(epreciation 6+:::
#otal +*9:*DDD
!llustration :D 0"roblem on profit and loss account and balance sheet1
1he follo.ing are the ledger balances of Global !ank %td. 'ro) the given trial balance
prepare profit and loss account and balance sheet as at 423432::2
3ebit )redit
&hare capital
2:+::: shares of Rs. 2:: each 2:+::+:::
!ad debts 2+2>+B2:
Reserve fund invest)ents 2:+::+:::
Reserve fund 2:+::+:::
General expenses 2+>2+62:
Current accounts 2+:2+66+22:
Interest paid 2+<:+92:
(eposit accounts <;+2:+24:
# E % $5c (Cr) 23632::: 2+2;+46:
$cceptance and guarantee 29+62+>2:
(iscount 2+64+B<:
,ndorse)ent and guarantee B6+:2:
Co))ission 66+26:
Cash 2+2<+96:
Interest received 9+42+2<:
Cash .ith R!I 2:+22+2::
,ndorse)ent guarantee (Control) B6+:2:
/.ing by foreign correspondents 2+::+66:
Custo)ers liabilities for acceptances 29+62+>2:
&hort loans <6+>2+:<:
%oans and advances 2+96+9<+B::
Invest)ents ;>+>2+96:
!ills discounted <2+2>+26:
#re)ises 22+2B+;::
:*,:*+9*,>D :*,:*+9*,>D
Ad?ustments:
2. Reserve Rs. <6+4>: for rebate on bills discounted.
2. #rovide for taxation Rs. 2:+:::
4. (epreciate pre)ises at 2:?
6. 1he profit and loss account balance is the balance left on the account after the pay)ent of
interi) dividend a)ounting to Rs. 2+::+:::
Global Bank Ltd
Balance Sheet as on :+.:.9DD+
Schedule
number
Amount 0Rs.1
Capital 2 2:+::+:::
Reserves and &urplus 2 22+B2+B>:
(eposits 4 2+B2+<6+69:
!orro.ings 6 <6+>2+:<:
/ther %iabilities and #rovisions 9 >6+4>:
#otal :*AD*D9*@AD
Assets
Cash and balance .ith Reserve !ank < 22+4>+<6:
!alance .ith banks and )oney at call and short notice B 3
Invest)ents > 2+:>+>2+96:
$dvances ; 2+2>+>9+4>:
'ixed assets 2: 2;+;<+22:
/ther assets 22 3
#otal :*AD*D9*@AD
Contingent liabilities and bills for collection 22 2<+2<+>6:
Global Bank Ltd..
"rofit and Loss Account for the Bear nded :+.:.9DD9
"articulars
Schedule
$umber
Amount
0Rs.1
!ncome:
Interest earned 24 B+22+<6:
/ther inco)es 26 66+26:
#otal A*>>*CCD
Ependiture:
Interest ,xpended 29 2+<:+92:
/perating ,xpenses 2< 6+:6+22:
#rovisions and Contingencies (see note) 2+6>+B2:
#otal A*+:*--D
"rofit G Loss:
#rofits b5d @2+2;+46: R 2+::+:::A 6+2;+46:
Iet profit for the year (I = II) 62+66:
#otal -*A+*ACD
Appropriations:
&tatutory Reserve (29? of 62+66:) 2:+<2:
Interi) (ividend 2+::+:::
#rofits and loss c5d 2+<2+2B:
#otal -*A+*ACD
Iotes on account +A 8
Qear ended
423:432::2 Rs.
2:+::: shares of Rs. 2:: each 2:+::+:::
9D*DD*DDD
&tatutory Reserve 2:+<2:
R5' 2:+::+:::
#rofit and loss a5c 2+<2+B2:
+9*A+*ACD
(eposits $ccounts <;+2:+24:
Current $ccounts 2+:2+66+22:
#otal 9*A+*@-*->D
Schedule - ; Borro=ings
&hort %oans <6+>2+:<:
#otal @-*C9*D@D
Rebate on !ills <6+4>:
#rovision for 1ax 2:+:::
#otal C-*:CD
Cash 2+2<+96:
Cash .ith R!I 2:+22+2::
#otal 99*:C*@-D
Schedule A ; balance =ith banks and money at call and short notice $il
Invest)ents ;>+>2+96:
$dd: Reserve 'und Invest)ent 2:+::+:::
#otal +*DC*C9*>-D
%oans and advance 2+96+9<+B::
$dd: !ills discounted <2+2>+26:
/.ing by foreign correspondents 2+::+66:
#otal 9*+C*C>*:CD
#re)ises 22+2B+;::
(3) (epreciation 2+22+B;:
#otal +,*,@*++D
Schedule ++ ; Other Assets $il
$cceptances for custo)ers 29+62+>2:
,ndorse)ents and Guarantees B6+:2:
#otal +@*+@*C-D
Schedule +: ; !nterest 7 3iscount
Interest received 9+42+2<:
(iscount 2+64+B<:
B+B<+:2:
(3) Rebate <6+4>:
#otal A*++*@-D
Co))ission 66+26:
#otal --*9-D
Schedule +> ; !nterest Epended
Interest paid 2+<:+92:
#otal +*@D*>9D
General ,xpenses 2+>2+62:
(epreciation 2+22+B;:
#otal -*D-*9+D
$ote : "ro/ision and )ontingencies
Reserve for !ad (ebt 2+2>+B2:
#rovision for 1ax 2:+:::
#otal +*-C*A+D
!llustration ,0"roblem of "rofit and Loss Account1
'ro) the follo.ing particulars+ prepare profit and loss account of City !ank %td for
the year ended 423:432::2.
Rs.
Interest on fixed deposits 2+B:+:::
Interest on loans 2+9:+:::
Co))ission charged to custo)ers >+:::
,stablish)ent expenses 6:+:::
(iscount on bill discounted 2+:9+:::
Interest on cash credits 2+2:+:::
Interest on current account 6:+:::
Rent and taxes 29+:::
Interest on overdrafts <:+:::
(irectors fees 6+:::
$udit 'ees 2+:::
Interest on &.!. (eposits <:+:::
#ostage and telegra)s 2+2::
#rinting and &tationary 2+:::
&undry charges 2+9::
!llustration +90"roblem of "rofit and Loss Account1
'ro) the follo.ing infor)ation+ prepare profit and loss account of 1hifty !ank for
the year ended 42.:4.2;;>
Rs. (in K:::)
Interest on loans 2+9;:
Interest on fixed deposits 4+2B:
Co))ission >2
#ay)ent to e)ployees 96:
(iscount on bills discounted 2+:<:
Interest on cash credit 2+24:
Rent+ tax and lighting 2>:
Interest on overdraft 2+96:
(irectors fees+ allo.ance and expenses 4:
$uditors fees and expenses 22
Interest on savings bank deposits <>:
#ostage+ telegra) and telephones 26
#rinting and stationery 2;
&undry charges 2B
Additional !nformation:
(i) #rovide for contingencies Rs. 2+::+::
(ii) 1ransfer Rs. 29+9B+::: to Reserve 'und
(iii) 1ransfer Rs. 2+::+::: to Central Govern)ent.
!llustration +@
'ollo.ing is the trial balance of (hanalaksh)i !ank %td.+ as on 42.4.2:::
(ebit Credit
&ubscribed Capital
9:+::: e0uity shares of Rs. 2: each
Reserve 'und
%oans+ Cash credit and overdraft
#re)ises
Indian Govern)ent &ecurities
Current (eposit
'ixed (eposit
&avings !ank (eposit
&alaries
General ,xpenses
Rent+ Rates and 1axes
(irectors 'ees
#rofit and %oss $5c 2.6.;;
Interest and (iscount
&tationary and &ta)ps (&tock of)
!ill #urchased and (iscounted
Interi) (ividend paid
Recurring (eposits
&hares
Cash in hand and .ith R!I
7oney at Call and &hort Iotice
2+>9+:::
9:+:::
6+::+:::
2>+:::
2B+6::
2+4::
2+>::
>+9::
6<+:::
2B+:::
9:+:::
2+;4+:::
>:+:::
9+::+:::
2+9:+:::
2+::+:::
2+29+:::
9:+:::
2<+:::
2+2>+:::
2:+:::
++*C,*DDD ++*C,*DDD
Additional !nformation
2. #rovision for bad and doubtful debts re0uired is Rs. 9+:::53
2. Interest accrued on invest)ents is Rs. >+:::.
4. Hnexpired discount a)ounts to Rs. 4>:
6. Interi) dividend declared .as 6? actual
9. Rs. 2:+::: .ere added to the pre)ises during the year.
<. ,ndorse)ent )ade on behalf of custo)ers totaled Rs. 2+29+:::
B. 7arket value of Govern)ent of India &ecurities .as Rs. 4+;:+:::
#repare #rofit and %oss $5c for the year ended 42.4.2::: and !alance &heet as at the
date in prescribed for).
!llustration +C
'ro) the 'ollo.ing balances extracted fro) the books of &rinidhi !ank %td.+ prepare #rofit
and %oss account and balance sheet as at 42.:4.2::4
3ebit )redit
&hare capital 2+9:+:::
General reserve <2+9::
#rofit and loss a5c <:+:::
7oney at call and short notice 22+9::
(eposits >+>;+9::
Cash in hand 4:+:::
Cash .ith R!I 69+:::
!orro.ings ;:+:::
!ills payable 26+:::
&taff security deposits 2:+9::
Invest)ents ;<+:::
!uildings <>+6::
!alance .ith other banks 9B+:::
Cash credits B+;9+:::
Interest on deposits and borro.ings 2+2>+9::
!ills purchased 2+>:+:::
(iscount on bills 29+:::
Co))ission and brokerage 24+9::
Interest on loans 2+B9+9::
Inco)e fro) invest)ents >+B::
&alary and other expenses B2+:::
$udit fees 9+2::
#ostage+ printing and stationery <+4::
(epreciation on assets 2+6::
+-*,C*9DD +-*,C*9DD
Ad?ustments:
a) #rovide Rs. 2:+::: for rebate on bills discounted.
b) !ills for collection Rs. 2+9:+::: and endorse)ent Rs. 2+6:+:::.
c) #rovide Inco)e 1ax S6:? of Iet #rofits.
!llustration 9+ 0"roblem on profit and loss account and balance sheet1
'ollo.ing is the trial balance of Canara !ank %td. as on 42.:4.2::2
3ebit )redit
Interest and (iscount 2+<:+:::
&hare capital <+::+:::
(eposits >+::+:::
1elegraphic transfer 2+::+:::
1ravelers letter of credit 4+::+:::
Gift che0ues <:+:::
#ension fund 2+::+:::
!orro.ings fro) bank B9+:::
Hnclai)ed dividend 29+:::
Rent 2:+:::
Co))ission 9:+:::
#rofit5%oss $5c on 2.6.2::2 6:+:::
!ills payable 2:+:::
!uilding 2+9:+:::
7oney at call and short notice 2+B9+:::
'urniture 6:+:::
Cash in hand 2+B9+:::
Cash at bank 4+29+:::
Invest)ents 2+B9+:::
%oan+ cash credit and overdrafts 22+6:+:::
Interest on deposits 2+B9+:::
$udit fees 2:+:::
&alaries 9:+:::
(irectors fees 9+:::
#rinting and stationary 9+:::
(epreciation B+9::
Ion = banking assets 2+::+:::
/ther ,xpenditure B+9::
9C*-D*DDD 9C*-D*DDD
Ad?ustments:
a) #rovide Rs. 9+::: for rebate on bills discounted.
b) !ills for collection a)ounted to Rs. 2:+9::.
c) #rovide Rs. 2+229: for bad debts.
d) #rovide Rs. 2+9:: for inco)e tax.
e) %iabilities on bills rediscounted Rs. B+9::
f) %iabilities outstanding on for.ard exchange contract Rs. 4+:::
g) (irectors propose 9? dividend on share capital.
#repare !ank accounts.

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