1st Maintaining the accounts relating to issue, forfeiture and reissue of shares.
When we issue share first time, it is the duty of accountant to records all the transactions relating to issue of share must be recorded in the books of company. The process of issue is completed the following way.
getting the application money with application
getting the allotment money when shares are allotted to shareholders
getting the final amount in the form of IST, second and final calls.
So when any amount we receive, it must be recorded by accountant of company. If we are refunding the amount then also its record must be kept in company books.
In company accounts, the accountant can face the problems of forfeiture of shares and reissue of forfeited shares. Many inexperienced accountant do 90% mistake in passing the voucher entries relating to forfeiture and reissue of shares. This is broad concept and I will write full tutorial on forfeiture and reissue shares. Today I am concentrating our all area of company accounts.
2nd Maintaining the debentures Accounts
Debenture is just loan which is taken by any company, so it is the duty of the accountant to record relating to issue and repayment of debentures.
3rd Maintaining the accounts of Bonus Shares
Bonus shares are the shares to existing shareholder. When company thing that it is according to the company policies, then company can issue the bonus shares. So record of bonus is all very necessary in company accounting.
4th Maintaining the accounts of Right shares
Right shares can also issue to existing shareholder on the proportion of their existing shares .These shares are also very important from recording point of view.
5th Maintaining regular accounts
Regular accounts means to pass the voucher entries related to purchase, sale, expenses, and losses, incomes of company or on the behalf of company. The recording way is equal to the recording way of sole trade or firm’s transactions.
6th Maintaining the final accounts of Company
Maintaining the final accounts of company is very necessary because company laws of different countries have given strict provision for making and publishing the final accounts of company. There the final statement is made in final accounts of company by accountants of company.
Profit and loss account
This account is equal to the profit and loss account of other organization.
Profit and loss appropriation account
It is very compulsory to make profit and loss appropriation account. In company level business , shareholder is differ from management or directors , so what is the dividend and what amount of profit and loss reserves in company will write in the debit side of this account. Other thing I will discuss in next articles.
Balance Sheet
This sheet shows the assets and liabilities of company. Company must show his contingent liabilities in the footnote in the below of this balance sheet.
7th Calculation of Managerial Commission
From accounting point of view, it is very necessary to calculate commission of different full time and part time directors of company. Different countries’ company laws can make the rules and regulations regarding these commissions, so you must know the current rates of such commission if you have the responsibility of making the company accounts.
The area of expenses and incomes of company is so wide, so thinking of company accountant must be so wide.
8th Dividend and Interest Calculation
Company account’s main part is to calculate the dividend and interest and then record. There are different types of dividend which is issue by company but interest is given on loan and debentures issued by company.
9th Corporate tax
Current rules and regulations relating to corporate tax depend on the finance bill and budget , so before calculation and recording of corporate tax.
Meaning of Bonus shares
Bonus means premium or gift which is paid normally in cash
Bonus shares
Bonus shares mean a gift or premium in form of stock by a company to its shareholders . It may be stated as extra dividend to share holder in a joint stock co. from surplus profits in the legal context a bonus share is neither dividend nor a gift . It is governed by regulations of the company law that it can neither be declared like a dividend nor gifted away . .
Source of bonus shares
The bonus shares can be issue out of profit or reserve which have been earned by the company these are profit or reserve which are free for the purpose of dividend and as specified in company act . but it can not view , those reserve and surpluses which are not earned by company that is which are existing due to revaluation of assets etc.
Profit and loss account
general reserve
revenue reserve
free reserves
dividend equalization fund
capital reserve
sinking fund
debenture redemption reserve only after redemption
development rebate reserve
allowance after expiry of 8 years
capital redemption reserve
share premium or security premium if received in cash
Bonus
Bonus is an accounting term , it means a premium or gift which is paid normally in cash.
Bonus shares
Bonus shares means a gift or premium in the form of stock by company to its shareholders . It may be stated as extra dividend to shared holder in a joint stock company from surplus profit s in the legal context a bonus share is neither dividend nor a gift . It is governed by regulations of the company law that it can neither be declared like a dividend nor gifted away.
" issue of bonus shares in liew of dividend is not allowed ."
Source of bonus shares
The bonus shares can be issue out of profit or reserve which have been earned by the company over the previous years .Normally these are profit or reserve which are free for the purpose of dividend and as specified in company act. but it can not views those reserve and surpluses which are not earned by company that is which are existing due to revaluation of assets etc.
•Profit and loss account
•general reserves
•revenue reserves
•free reserves
•dividend equalization fund
•capital reserves
•sinking fund or debenture redemption reserve only after redemption
•Development rebate reserve /allowance after 8 years
•Capital redemption reserve
•Shares premium or security premium if received in cash.
Corporate Accounting Part-II
SEBI Guidlines for determining maximum quantom of bonus issue
First test
Residual reserve test
As per this guidline the residual reserve after the proposal of capitalisation ( bonus issu) should be at least 40% of increased paid up capital
5 Free reserve - 2 paid up capital before the bonus issue
= ------------------------------------------------------------
7
2nd test
Profitability requirement test
As per this guidline 30% of average amount of profit before tax in the previous three year should yield a rate of dividend of expended capital base of the company at 10%
= 3 average profit - existing share capital
3rd test
Maximum limit requirement
This test indicates teh maximum amount which can be utilised for issue shares capital at one time shall not exceed the total amount of paid up equity capital of the company
Amount of bonus < total existing quity paid up capital
To determine a maximum amount of bonus which can be decleared the test mention above will be apply . Firstly the first two test will be consider the amount of bonus will be restricted upto the lower amount but this amount will not exceed the existing paid up capital of the company .
In brief the following steps should be consider for the purpose of bonus
1. Bonus shares not permitted in less existing partly paid up shres are converted into fully paid up shares
2. Bonus can not exist teh paid up equity capital of the company
3. The balance of residual reserve must not less than 40% of increased capital
4. 30% of average profit before tax of previous 3 year must yield 10% dividend on the increased capital
Accounting treatment of bonus shares
I am giving the full detail of accounting treatment of bonus shares step by step
1st case
When the partly paid up shares are converted into fully paid up shares through bonus issue
For providing the amoutn of bonus out of reserve , then the following journal entry will pass
Capital reserve account debit
general reserve account debit
revenue reserve account debit
free reserve account debit
dividend equalization fund account debit
profit and loss account debit
Bonus to equity shareholders account credit
For amount due on final call of shares ( Existing shares unpaid amount
Share final call account debit
Share capital account credit
For adjustment of final call amount out of profit
Bonus to shareholder account debit
share final call account credit
2nd case
When new fully paid up bonus shares are issued
a) for providing amount of bonus
Capital reserve account debit
share premium account debit
capital redemption reserve account debit
other general reserve account debit
Profit and loss account debit
bonus to shareholder account credit
b) for issue of bonus
Bonus to equity shareholder account debit
equity share capital account credit
Calculation the value of bonus shares
Steps for calculation the value of bonus shares
1st step
Take the basis of bonus issue for the purpose of determining for purpose of total amount of bonus basis of bonus issue.
(a) To convert the existing partly paid up shares into fully paid up shares
Numbers of existing equity shares X unpaid amount
b) To determine the number of bonus shares
Bonus shares numbers Total no. of issued shares
= ________________ X _________________
Basis issue numbers
c) Amount of new bonus shares
= no. of bonus shares X issue price
Steps of capital budgeting process
Capital budgeting is process of selecting best long term investment project . Capital budgeting is long term planning for making and financing proposed capital out laying
Steps for capital budgeting process
Ist step
Identification involved in capital budgeting proposals
2nd step
Screening the proposal
3rd step
Evaluation of various proposals
4th step
Fixing the priorities
5th step
Final approval and planning the capital expenditure
6th step
Implementing the proposal
7th step
Performance review
Terms used in Corporate Accounting
¤ Corporate or Company
Corporate or company is the synonym. Company means association of person which do any business for earning profit. But it must register and formed under any company law of any country. Because company is an artificial person and do work with separate entity. Company has its own charter and internal article of association.
¤ Shares
This is main term of corporate accounting. When we divide total capital of company into parts then each part is called share. Suppose, if you have 100000 capitals and if you divide into 1000 parts. Then it means company has 1000 shares of 100 rupees each.
¤ Preference Shares
Preference shares are the main type of shares if company issues that type of shares, then the share holder of these types of shares has the benefit that they can get part of profit with fixed rate and before giving the part of profit to equity shareholders. In the end of company, these shares are get preference of their repayment.
¤ Equity Shares
Equity Shares are the shares which are differ from preference shares. The shareholder of these shares has no preference relating getting dividend or any repayment. They are real owner of company and have the right to give the vote.
¤ Dividend
Dividend is that part of profit which distribute among shareholder. Its other name is divisible profit. Dividend may be given by cash or through bonus or any other type.
¤ Debenture
Debenture is just paper which is given by company when company takes loan from public. It is issued under company seal. In this paper company accepts that he will repay the loan taken by him after certain period with given rate of interest.
¤ Redemption
Redemption is technical term in corporate accounting .It means repayment of loan taken by company. When company issued debenture then company also writes the mode of redemption of debenture. There are different ways of redemption of debenture. The best way is to create sinking fund and keep some part of profit in it as annual installment. So that company can pay his taken loan without any tension.
¤ General Reserve
General reserve is the part of retained profit. It is very compulsory to make general reserve in company for payment of contingent liabilities or for development of company. Every finance bill has right to amend or change the rate of % in general reserve. This part is not issued as dividend
Accounting Treatment of issue of shares on premium and discount
Some time a company can decide to issue of shares on premium or on discount. In both situations we must know the basic concept before doing any accounting treatment.
Issue of shares on premium
Issue of shares on premium means that if company wants to get more money of each share. Then the company can demand premium with the face value or nominal value of shares. This is called issue of shares on premium. Suppose if the face value of shares is RS.100 Company can issue of his 10000 @ Rs. 105 it means company is also demanding RS. 5 per share as premium. According to new amendments in Company law 1956, Company must open security premium account, if co. issue shares on premium. All money which got with name of premium will transfer to security premium account . The following entry will passed in the books of company
For the due of share Allotment money
1.Shares Allotment Account Debit xxxx ( with the total amount )
Shares Capital Account Credit xxxx ( With the face value of shares)
Security Premium Account Credit xxxx( With the amount of premium)
2. For Allotment money Received
Bank Account Debit xxxx ( face value + Premium )
To Share Allotment Account xxxx
If company has demanded the premium with his call money from share holders , then on the place share allotment account we must write share call account , all other journal entry will be same.
According to Section 78 , We will use this fund according to guidelines of law.
Meaning of Issue of shares at discount :-
It means that company demands less amount than face value of shares .This less amount is called discount on issue of shares .
Journal entry of discount on issue of shares
When we receive allotment by giving discount on issue of share
1 Amount due of allotment
Share Allotment Account Debit xxxx( face value of allotment – discount)
Discount on issue of share account Debit xxxx( amount of discount)
To Share capital account
2. When allotment money actually received
Bank account debit xxx( face value of allotment –discount)
To share allotment account
Accounting treatment of issue of share for purchasing an fixed asset
In the situation when company want to buy any fixed asset , then company can issue shares to supplier of fixed asset .
At this time company pass the following journal entries :-
For purchasing fixed on credit
Fixed asset account debit xxx
Creditor account credit xxx
For issue of shares
Creditor account Debit xxx
Share Capital Account credit xxx
In case if company issue in premium or on discount to the suppliers of fixed asset . Then we first calculate the number of shares for doing any accounting treatment for this
In case of issue at premium
Numbers of shares
Value of Fixed asset
= ------------------------
Value of per share (Face value + premium)
In case if issue of shares at discount
Numbers of shares
Value of Fixed asset
= ------------------------
Value of per share (Face value – Discount per share)
After this the following journal entry will pass
Suppose xy company purchase the machinery of RS. 90000 by issue of shares at discount of shares of 10% if face value of share is RS.10
Journal entries
Machinery account debit 90000
Creditor account credit 90000
2 for issue shares to creditors at discount
No. of shares =90000/9 = 10000
Amount of discount =RS.10000
Creditor account Debit 90000
Discount on issue of share account debit 10000
Share capital account credit 100000
Suppose xy company purchase the machinery of RS. 120000 by issue of shares at Premium of shares of 20% if face value of share is RS.10
Journal entries
Machinery account debit 120000
Creditor account credit 120000
2 for issue shares to creditors at discount
No. of shares =120000/12 = 10000
Amount of Premium =RS.20000
Creditor account Debit 120000
Share capital account credit 100000
Security premium account credit 20000
Adjustment in company’s balance sheet for call in arrear
When a company makes the balance sheet after first time issue of shares. There may be the case of call in arrear.
In my earlier article, I have already explained call in arrear and call in advance. In this article, I want to explain, how you will do the adjustment in balance sheet for call in arrear. Call in arrear must be deduct from Called up capital
Called up Capital = Capital demanded at the time of Application + Allotment + and calls money
Less call in arrear = at the time of allotment and due date of call money
After deducting, it we can easily calculate paid up capital
Accounting Treatment of Call in arrear and call in advance
Call in Arrear
Call in arrear means company has demanded his due amount of allotment or call money but .But if shareholder does not pay his allotment money on due date it deems as call in arrear , this is the asset of company and it must deduct from call up capital for calculation paid up capital. If there is no any rule the company has right to get 5% interest on call in arrear.
Journal Entries for call in arrear in the books of company
1st journal entry will write at the time of due but not received the allotment money from share holder
Call in Arrear Account Debit xxxx
To Share Allotment Account xxxx
2nd When call in Arrear received from shareholder
Bank Account Debit xxxx
To Call in arrear Account xxxx
3rd journal entry is related to company’s interest received on due amount of call in arrear. This is the income of company:-
Bank Account Debit xxxx
To Interest on Call in Arrear xxxx
Call in Advance
Call in advance means that company did not call the allotment or calls but shareholder gives the call money in advance form .So this is the liability of company . Company is liable to pay 6% interest on call in advance to shareholder
Journal Entry for call in Advance
1st journal entry will pass for adjustment of advance money of allotment received at the time of application
Share Allotment Account Debit xxxx
To Call in Advance xxxx
2nd Journal entry will pass for when the amount of allotment due
Call in Advance Account Debit xxxx
To Share Allotment Account xxxx
3rd Journal Entry for paying the interest on call in advance to shareholder
Interest on call in advance Account Dr. xxxx
To Bank Account xxxx
Definition of share forfeitures
Share forfeitures means cancel the power of share holder if he does not pay his call money when company demands for this .Company will give 14 days notice, after 14 days if shareholder did not pay then company will forfeit his shares and cut off his name from the register of shareholder. Company will not pay his received fund from shareholder.
Deep accounting treatment is divided in following parts
1st situation
Simple accounting treatment
In this situation shares issue at part and there is no pro-rata situation. So the following entry will pass
Share capital Account Debit (called up amount of forfeited shares
Share forfeited Account Credit (Amount received of forfeited shares)
Share call in arrear Account Credit (Amount did not receive of forfeited shares)
2nd Situation
When shares issue on discount and premium
Dear friend if shares are issue on premium or on discount, then if we did not receive the premium, then we write in journal entry otherwise we will not show security premium account in share forfeiture journal entry
Share capital Account Debit (called up amount of forfeited shares)
Security premium account Debit (If premium is not received from share holder)
Share forfeited Account Credit (Amount received of forfeited shares)
Share Allotment Account Credit (If allotment money is not received)
Share call in arrear Account Credit (Amount did not receive of forfeited shares)
In case shares are issued on discount
Share Capital Account Debit
Share Forfeiture Account Credit
Share Allotment Account Credit
Share call in arrear account credit
Discount on issue of shares account credit
3rd situation
When shares issue pro-rata base
In case there is also difficulty to calculate the net amount of allotment received in case some amount is not received and same person we have adjust some amount of share application.
Calculate the net amount of allotment received
Total amount of allotment money due xxxxxx
Less Adjustment with application
Money xxxxxx
_________________
Xxxxxx
Less Amount not received
As forfeited shares
Xxxxxxx
Less (-) xxxx
Perportion in
Not received amount
Of adjusted application
Money which is
We received in advance
Total not receive allotment
= ------------------------------- x Total adjustment of application money
Total Allotment money
________________________________
Net amount not received
In the form of allotment xxxxxxx (-) xxxx
______________________________ ____________
Net Amount received in the form of
Allotment xxxxx
The following journal entry will passed
Share capital account Debit (Called up capital)
Share forfeiture Account Credit (Total Amount received of forfeited shares)
Share Allotment Account Credit (Net amount not received in the form of allotment, for calculation of this amount you must understand and use above formula)
Share Call in Arrear Credit (if you are not received any call money of share forfeited)
4th situation
When shares fully reissue
Reissue means sale to any other person after forfeiting from previous share holder.
In this situation we can reissue of share in discount or premium. For doing this we have to pass the following journal entry
Bank Account Debit
Discount on issue of shares Debit
Share forfeiture account Debit (Discount on reissue of shares)
Share capital account Credit (Face value of reissue of shares)
Security premium Account Credit (If shares reissue at premium
So difference between amount received from forfeiture and discount on reissue share will go to capital reserve account and following entry will passed
Share forfeited account Debit
Capital reserve account credit
This capital reserve account will show in liability side of balance sheet of company.
5th situation
When Shares partly reissue
It is most difficult situation when you will see the question paper and you found the sum where is pro-rata situation , then share holder did not pay and then these forfeited shares party reissue to another share holder because
Above 4 situations will cover but in the 4th situation’s last journal entry will pass after making forfeiture account in working note because only the amount go to capital reserve which is sold or reissue gain other will go to balance of share forfeiture account upto that date until we reissue all shares.
Share forfeiture Account
Credit Side of this account
By share capital Account 2000
Suppose we get 100 shares forfeiture money received
Rs,20 per share
_________
2000
________ _
Debit Side of this account
To share capital account 250
Suppose we have reissue of 50 shares at reissue discount Rs.5
To capital Reserve account
We will calculate this amount after deducting the proportion of of this gain according to sold shares
2000 x 50/100 – 250 = 750
To balance C/d 1000
_____________________________
2000
Then following journal entry will pass
Share forfeiture account Debit 750
To capital Reserve Account Credit 750
Corporate Accounting Part-IIIShare forfeiture account Debit 750
To capital Reserve Account Credit 750
Accounting treatment of Issue of debenture
For rendering the accounting treatment of issue of debenture, you should know debenture and what is use of debenture in any corporate.
Debenture is just long term loan which is taken by company. For this company issue debentures. This is just like a paper on which company has written that company is taking loan from debenture holder with given term. Company has to decide the rate of interest and repayment amount and time of repayment of debenture. These terms must be written in debenture paper at the time of issue of debenture. There are many type of debenture which can be issued by company. It may convertible or non convertible. It means that company converts debenture in to share if company issued convertible debenture but if company issued non convertible, company has no right to convert debentures into shares. Company can also redeemable and non redeemable debenture .It means that company repays the full amount of debenture holder after some time if company has issued redeemable debentures but if company issued non redeemable debentures, company will not repay in his life time. These debentures only will redeem after the winding up of company.
Because of this is important transaction relating to company, so it is very necessary to record in the books of company. Let us start the accounting treatment of issue of debenture.
A – Issue of Debenture at Par
1st journal Entry
When company receives application money of debentures
Bank account Debit
Debenture Application Account Credit
2nd Journal Entry
When company accepts the applications
Debenture Application Account Debit
Debenture Account Credit
3rd Journal Entry
When Allotment money of debenture due
Debenture Allotment Account Debit
Debenture Account Credit
4th Journal Entry
When Allotment money of debenture received
Bank Account Debit
Debenture Allotment Account Credit
5th Journal Entry
When Call money of debenture is payable
Debenture Calls Account Debit
Debenture Account Credit
6th Journal Entry
When Call money of debenture is received
Bank Account Debit
Debenture Calls Account Credit
B- When Company issue of debenture at premium
If premium is receivable with application money
1st Journal Entry
When amount of application received with premium
Bank Account Debit
Debenture Application account Credit
2nd Journal Entry
Debenture Application Account Debit
Debenture Account Credit
Security premium Account credit
If premium receivable on allotment then
Debenture Allotment account debit
Debenture Account Credit
Security Premium Account Credit
And allotment money received with premium
Bank account Debit
Debenture Allotment Account Credit
When Debenture Issued At discount
Debenture Allotment Account Debit
Discount on Issue of Debenture Account Debit
Debenture Allotment Account Credit
When discounted amount of debenture is received
Bank Account Debit
Debenture Allotment Account Credit
Redemption of Debenture and method of redemption
Redemption of Debenture means repayment at the maturity of debenture. Because earlier we told that debentures are long term loan so it is very necessary to redeem the debentures.
1st Method
Lumbsum method
It means when company repay the Lumbsum amount to debenture holder . There following sub method of this method
A) Without Provision
According to Company law , if you have to redeem without any provision , it is necessary to make reserve of debenture redemption reserve with 50% of total amount of debenture so that company can easily repay the debenture without any provision at the time of redemption the following journal entry will pass.
Debenture Account Debit
Debenture holder Account Credit
2nd journal Entry
Profit and loss Appropriation Account Debit
Debenture Redemption Reserve Account Credit
3rd Journal Entry
Debenture holder Account Debit
Bank Account Credit
4th Journal Entry
Debenture redemption Reserve account Debit
General Reserve Account Credit
Sinking Fund – Method of redemption of Debenture
This is very important method of redemption of debenture. Sinking fund means take one part of profit for repayment of debenture. This is calculated with sinking fund table. This is invested in such scheme which gives us Lumbsum amount so that we can easily repay the debenture without any tension. This is very popular and scientific method of redemption of debenture. In this method we open the sinking fund and sinking fund investment account. Sinking fund’s other name is also Debenture Redemption Fund Account. The following accounting treatment is done by the accountant of company when the company follow this method .
In the end of first year
1st journal entry for taking reserve from profit
Profit and loss appropriation account Debit
Sinking Fund Account Credit
2nd Journal Entry for invest the sinking fund
Sinking fund investment Account Debit
Bank Account Credit
In the end of next years but not end last year
3rd Journal Entry for receiving interest on investment
Bank Account Debit
Interest on sinking fund investment Account Credit
4th Journal Entry for transferring interest to sinking fund
Interest on Sinking fund investment account Debit
Sinking fund Account Credit
5st journal entry for taking reserve from profit
Profit and loss appropriation account Debit
Sinking Fund Account Credit
6th Journal Entry for invest the sinking fund
Sinking fund investment Account Debit
Bank Account Credit
At the end of last year
Bank Account Debit
Interest on sinking fund investment Account Credit
7th Journal Entry for transferring interest to sinking fund
Interest on Sinking fund investment account Debit
Sinking fund Account Credit
8st journal entry for taking reserve from profit
Profit and loss appropriation account Debit
Sinking Fund Account Credit
9th Journal Entry for receiving the money from sale of investment
Bank account Debit
Sinking fund investment account Credit
10th journal entry for any profit on sale
Sinking Fund investment Account Debit
Sinking fund account Credit
11th journal entry for repayment to debenture holders
Debenture Account debit
Bank account credit
12th journal entry for balance of sinking fund transferred to general reserve account
Sinking fund account debit
General reserve account credit
Accounting Treatment of Provision for Income Tax
Before writing this article , I have studied deeply several books of accounting . Actually this type of provision is needed in Corporate type business . Because in the sole trade and partnership firm there is no treatment of provision for income tax and income tax paid because above two type business level , it is the duty of business man to pay income tax personally . So in above situation if he take any fund from business for paying income tax , it is deemed as drawing or other words we can say that his capital will reduce if you pick some amount for paying any income tax . No other treatment is done in sole trade or partner ship
Now In Case of Company or Corporate
I am giving you full detail of accounting treatment , if you have to do this type of work in any company .
Ist Step
Understanding the meaning of Company . I have already read on it see .
2nd Step
Understanding the meaning of provision of Income tax
In
So without actual earning we starts to estimate earning .
For Example
Suppose company can guess that it will earn RS. 5 crore in this year .
So on this advance guess company make his reserve or provision of income , it may be the 5% or 10% or 15% or 30% on his estimated income. This is called provision for income tax .
Now company Make the voucher entry of this provision by providing amount from profit and loss account
Profit and loss account Debit
Provision for income tax account Credit
After provision or estimated income tax , company submit his advance income tax return to income tax department ,
then pass the following entry
Advance Income tax account debit
Bank Account credit
After one year when income tax department calculate the real income tax by providing the real income position of company in previous year .
•Adjustment of actual income tax with provision
Actual income tax will adjust with provision of income tax by passing following adjustment entry
Provision for income tax account Debit
Income tax Account ( Actual after assessment ) credit
•We must calculate the difference between actual paid tax and ( advance + tds )
If advance and tds is more than actual tax , then income tax department return your excess tax paid
At this time two general entries will pass
1st transfer advance tax and tds to income tax account
Income tax account debit
Advance tax account Credit
Tds account Credit
2nd journal entry will pass for return the amount
Bank account debit
Income tax account credit
If advance and tds is less than actual tax , then income tax department demand more tax from you , and you will pay by following journal entry
1st transfer advance tax and tds to income tax account
Income tax account debit
Advance tax account Credit
Tds account Credit
2nd journal entry will pass for return the amount
Recent Trends in published accounts
Indian Company law 1956's section 210 , 216, and 217 binds board of directors of company to show profit and loss account and balance sheet of company and auditor's report's copies in annual general meeting of Company . All these reports are called annual reports of company . It is also compulsory for company to publish both in print and now in website also . These reports show the performance of company to public .
These days many companies are using charts and graphs for publishing their final accounts . Because , it is attractive and gives good impression to customers and interested people of company . Many charts are so popular and be successful for comparison of financial data of company .
•Due to advancement of Internet technology you can make charts and Graphs of production cost , sale , income and expenses classification and distribution of income into dividend and tax and present in website of Company .
For learning point of view I have made some chart of company's data . all these reports are made in excel or in online with Docs spreadsheet.
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