Finalization of accounting
Sayed Nabil (336 Points)
18 April 2024
what is the step of finalization of sole proprietorship accounts
Sayed Nabil (336 Points)
18 April 2024
prasad Nilugal
( GST Practitioner & Accounts )
(14221 Points)
Replied 18 April 2024
Sole Proprietorship comes under Non corporate entities , and for Non corporate entities guidelines has been issued by ICAI for preparation & finalisation of Financial Statements including taxation please refer those latest Guidelines , Take help form CA .
Vaneet Monga
(Private)
(265 Points)
Replied 18 April 2024
prasad Nilugal
( GST Practitioner & Accounts )
(14221 Points)
Replied 18 April 2024
prasad Nilugal
( GST Practitioner & Accounts )
(14221 Points)
Replied 19 April 2024
Check out on ICAI. web site https://www.icai.org / guidence notes ( search in Google) . take help of CA for preparation of Financial Statement . You can also visit nearby ICAI office ,you will get printed copy .
prasad Nilugal
( GST Practitioner & Accounts )
(14221 Points)
Replied 21 April 2024
In addition to above I will give you more information about step to finalisation of Sole proprietorship .
1) After preparation of Trail balance , you find out which Item goes to Trading Account , profit & Loss Account , & Balance sheet .
2) Then put certain mark in Trail balance , like Item which are suppose to go in Trading Account you Put "T" as mark in Trail balance , "p" for Items In Profit & loss Account , "B" for Balance sheet .
3) As per above mark put items in Trading A/c , Profit & Loss A/c and Balance sheet from Trail Balance .
4) Then mark " A" for year end Adjustment entries in Trail balance
5) Do all year end adjustment entries like given bellow
a) closing Stock
b) Deprecation
c) Outstanding Expenses
d) Advance received
e) Prepaid Expenses
f) Income Accrued but not received
g) Any provision you want make
6) After posting all items from Trail balance , and doing all year end adjustments entries , balance the Trading Account , after balancing either Gross Profit or Loss will transfer to Profit & Loss Account
7) Balance the Profit & Loss Account transfer either profit or loss to Capital account of the Sole proprietor .
8) Any Drawing , personal Income tax paid will transfer to Capital Account
9) After doing all above procedure make total of Asset & Liability side of balance sheet , It must Tally .
But now a days Accounting software's like Tally is available , so you will get ready made Trail balance , Trading Account , profit & Loss Account , Balance sheet Etc , Also if you go though Guidelines of ICAI , according to guidelines , you have to prepare Vertical Profit & Loss Account , and in some cases Accounting Stranded (AS) may applicable while finalising Accounts , So you go through Guidelines of ICAI and prepare accordingly .
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