income tax

This query is : Resolved

Guest

Guest (Querist)

22 October 2008 how do we draft the balance sheet of an individual ?1st time when he files the return....how we add his assets and liabilities...if he does nt carry any business or profession.

Bharath Kumar

Bharath Kumar (Expert)
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22 October 2008 Cash account / Bank account Dr
To Capital account
(Amount brought into business)

Fixed Assets account Dr
To Cash / Bank account / Creditor account

For further entries refer financial accounting books

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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23 October 2008 Balance sheet is nothing but the list of assets and liabilities. List all assets and liabilities. If the assets are more put the difference between assets and liabilities as networth. If the liabilities are more the networth is negative.

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CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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23 October 2008 It is assumed that we are going to prepare the B.Sheet as on 31.03.2008
For compiling the Balance Sheet of any individual for the first time as on said date, gether the following information:

All assets in possession with respective cost of acquisition, be it Property, Shares, other investments with cash and bank balance as on 31.03.2007 and the liabilities thereagainst. The total of assets minus liabilities is the Capital as on 31.03.2007 which is represented by the assets acquired as on date as reduced by the amount of liability.

Now, start with this capital as the opening balance for FY 07-08. All cash and bank transactions may now be accounted for one by one keeping in mind the capital or revenue concept. Any addition to assets or liabilities may accordingly be accounted for. Items of revenue nature like House Hold withdrawls, amount gifted, taxes paid or accretion to capital by salary, interest income, dividend income etc may be dr or cr to capital account.