The balance sheet is one of the most significant financial statements of a business entity. They acknowledge details associated with assets and liabilities. They depict the exact nature of these assets and liabilities. Let us take a look at the contents of balance sheets and some peculiar items they contain.
The Form of a Balance Sheet
A balance sheet comprises of 2 parts. One side shows assets, whilst the other comprises of details of liabilities. Every balance sheet of a company has to be outlined in accordance with the Revised Schedule VI of Companies Act, 1956.
Schedule VI also comprises of many other disclosure prerequisites. Balance sheets and statements of profits and losses must contemplate them as well.
The pattern of these should be similar as the Schedule provides :
- Final accounts of the Not-for-Profit establishments are outlined in a similar format as that of a business enterprise
- However, a few items of income and expenses of such establishments are somewhat distinct in nature and require specific attention in their treatment in final accounts. They are peculiar or distinctive to these establishments
- Some of the customary peculiar items are elucidated as under Subscriptions: Subscription is a membership fee financed by the associate on the annual basis
- This is the primary source of income of such establishments. Subscription financed by the members is depicted as a receipt in the Receipt and Payment A/c and as income in the Income and Expenditure A/c
- It may be distinguished that Receipt and Payment A/c depicts the total amount of subscription actually received during the financial year while the amount depicted in Income and Expenditure A/c is limited to the figure associated to the current period which is irrespective of the fact whether it has been received
The above mentioned is the concept that is explained in detail about Some Peculiar Items in accounting for the class 12 students. To know more, stay tuned to BYJU’S.