Professional Documents
Culture Documents
Statements of Limited
Companies
P. GURU PRASAD
FACULTY MEMBER
INC GUNTUR
General requirements of the companies act
Definition
Definition
Definition 1:-
Charge, claim, or lien on asset or property, usually as a
result of a loan.
Definition 2:-
Promissory note or a corporate bond which (in the US) is
backed generally only by the reputation and integrity of
the borrower and (in the UK) by the borrower's specific
assets. When unsecured, it is called a bare debenture or
naked debenture; when secured by a charge on a
specific property, it is called a mortgage debenture.
Unsecured loans
Fixed deposits
Short term loans from banks
Loans from others
Current liabilities
Bills payable (accounts payable)
Sundry creditors
Amount due to subsidiary companies
Advance payment received
Unclaimed dividend
Other’s liabilities
interest accrued but not due on loans
Accounts payable (A/P)
Definition
Unpaid bills. Accounts that are owed to suppliers
(trade creditors) as distinguished from accrued
interest, rent, salaries, taxes, and other such
accounts. Accounts payable are shown under
current (short-term) liabilities in the balance
sheet. Lenders and investors examine the
relationship of these accounts to the firm's
purchases in order to judge the soundness of its
day to day financial management.
Accrued interest
Definition
Interest earned but not received (realized).
For example, bonds usually pay interest
every six months, therefore interest
accrues between one interest payment
and the next. The buyer of a bond pays its
market value plus the interest earned up
to the settlement date.
Sundry creditors
Definition
Definition
Resource created by the accumulated capital
surplus (not revenue surplus) of a firm, such as
by an upward revaluation of its assets to reflect
their current market value after appreciation.
Allocating such sums to capital reserve means
they are permanently invested and will not be
paid as dividends.
Provisions
Provision for taxation
Proposed dividends
Provision for contingencies
Provision for provident fund and to their
schemes
Provisions for insurance, pension and
similar staff benefit schemes
Other provisions
Provision
Provision: A present obligation which satisfies
the rest of the definition of a liability, even if the
amount of the obligation has to be estimated.
In financial accounting, provisions are liabilities
similar to accruals, for which the amount or
probability of occurrence are not known.
Typical examples are provisions for warranty
costs and provision for taxes, or for the results of
court ruling.
Sometimes, the term reserve is used instead of
term provision; such a use, however, is
inconsistent with the terminology suggested by
International Accounting Standards Board.
Reserves
In financial accounting, the term reserve is most
commonly used to describe any part of
shareholders' equity, except for basic share
capital. Sometimes, the term is used instead of
the term provision; such a use, however, is
inconsistent with the terminology suggested by
International Accounting Standards Board.
Reserve - ACCOUNT used to earmark a portion
of EQUITY or fund balance to indicate that it is
not available for expenditure. An obsolete term
in the United States. More commonly used in
Europe.
Reserves
Equity reserves are created from several
possible sources:
Reserves created from shareholders'
contributions, the most common examples of
which are:
legal reserve fund - it is required in many
Commission =
rate of commission
profit before commission
* 100+rate of commission
Commission payable to more than
one member of managerial staff
There may be an agreement that the
whole time directors will get commission at
a fixed rate on net profits after the
commission of the part time directors.
Again the part time directors will get
commission at a fixed rate on net profit
after the commission of the whole time
directors. In this situation, the commission
of each group is calculated with the help of
simultaneous equations.( refer 7.3)
Thank you
"When people say to me: "How do you do
so many things?" I often answer them
without meaning to be cruel: "How do you
do so little?" It seems to me that people
have vast potential. Most people can do
extraordinary things if they have the
confidence or take the risks. Yet most
people sit in front of the TV and treat life
as if it goes on forever." -- Phillip Adams