audit report
This query is : Resolved
05 February 2011
dear sir
my company has not started its commercial trading activity till the end of 31 march only it has purchased stock in trade for trading (i.e.no sales has been made till date after it's incorporation) whether it for accounting it will be deemed that company has not started its operation wheather we have to prepared profit & loss account if no how we will show purchase & closing stock in books of accounts if yes than wheather we have to expensed all the pre-operative expenses in the current year profit & loss account.
my company has not started its commercial trading activity till the end of 31 march only it has purchased stock in trade for trading (i.e.no sales has been made till date after it's incorporation) whether it for accounting it will be deemed that company has not started its operation wheather we have to prepared profit & loss account if no how we will show purchase & closing stock in books of accounts if yes than wheather we have to expensed all the pre-operative expenses in the current year profit & loss account.
06 February 2011
Although there is no sale, books including P/L and BS is to be preapared. Purchase has to be taken as inventory, exp may be deffered.
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06 February 2011
Agreed with Bhagt Ji. However pre operative expenses should be charged to p & l account fully so as to comply with Accounting Standards and compliance of 211(3C) of the Companies Act,1956.
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