Balance Sheet Finalisation

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Querist : Anonymous

Querist : Anonymous (Querist)

10 April 2010 What are the points of consideration in BAlance Sheet Finalisation of Individaul, Propreitorship Business and PArtnership Business.

What ratios are to checked and what are ideal ratios.
Kindly give explaination with significance of ratios.

CMA.Palani Arumugam

CMA.Palani Arumugam (Expert)
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10 April 2010
1) Ensure all the incomes and expenses are booked
2) Ensure provisions are made for income receivable and expenses payable for the period of the financial year
3) Provide depreciation on fixed assets
4) Closing stock valuation

5) In case of partnership firm there is a limit for interest to partners, remuneration to partners.
6) Check the GP ratio whether matching with the previous year, if there much variation, it should be justified. Netprofit ratio may change depending upon the administrative expenses. But there should be a proper justification if there variation in GP ratio.