06 December 2009
1. A proprietor can maintain his balance sheet in merged format : both the assets and liabilities of personal and business can be shown together.
2. Even if you want to maintain personal balance sheet; take-off the personal assets by crediting the assets and debit the capital account of proprietor. Similarly; take-off the personal liabilities by debiting them and crediting the capital account.
3. In case you select the solution number 1 above, if you have not taken certain assets into your records for example a house inherrited from your father; you can include that amount in your capital account which was shown in your father's balance sheet. In this manner you will introduce these assets. Similarly; what liabilities you have incurred personally; you can introduce in the business also.
4. For filing of Income-Tax Return; either you can show only business transactions (firm's balance sheet) or you can merge the both (firm and individual).
5. If you show only business balance sheet in Income-Tax; still your personal income are to be added in the Computation of Income.
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