Академический Документы
Профессиональный Документы
Культура Документы
A.MANORANJAN
Registration No.BC0150014
Submitted to
Prof. P. Kumaresan
1
Declaration
2
Introduction 04
Objective 04
Methodology 04
Meaning 05
Definition 05
Trading account 05
Balance sheet 07
Conclusion 19
Result 20
References 21
3
Introduction:
Final accounts give a concise idea about the profitability and financial position of a
business to its management, owners, and other interested parties. All business transactions are
first recorded in a journal. They are then transferred to a ledger and balanced. These final tallies
are prepared for a specific period. The preparation of a final accounting is the last stage of the
accounting cycle. It determines the financial position of the business. Under this it's compulsory
to make trading account, profit and loss account and balance sheet.
Objective:
To know the concept of final accounts
To know the profitability and financial position of Canara bank for five years
(2010 2014) with the help of their final accounts.
Methodology:
This report is fully based on secondary data. Secondary data relating to final accounts is
collected from various internet sources and books. Canara bank has been takes as sample for
study, with the help of five years of their final accounts the researcher had concluded the
profitability and financial position of Canara bank
4
Final accounts
Meaning:
Final accounts give a concise idea about the profitability and financial position of
a business to its management, owners, and other interested parties. All business transactions are
first recorded in a journal. They are then transferred to a ledger and balanced. These final tallies
are prepared for a specific period.
The preparation of a final accounting is the last stage of the accounting cycle. It
determines the financial position of the business. Under this it's compulsory to make trading
account, profit and loss account and balance sheet.
The term "final accounts" includes the trading account the profit and loss account and the
balance sheet Section 209 of The Companies Act makes it compulsory for companies to keep
certain books of accounts.
Definition:
Manufacturing account,
Trading account,
Trading account:
5
A trading account sheet shows the results of the buying and selling of goods. This sheet is
prepared to demonstrate the difference between selling price and cost price. The trading account
tally is prepared to show the trading results of the business, e.g. gross profit earned or gross loss
sustained by the business.
A trading account is similar to a traditional account, holding cash and securities, and is
administered by an investment dealer. The account is held at a financial institution and
administered by an investment dealer that the account holder uses to employ a trading strategy
rather than a buy-and-hold investment strategy.
Trading accounts are usually associated with day trading. Day trading carries the risk of
complete loss of investment or more. The largest risk tends to stem for the use of margin. Day
trading margin for non-IRA accounts is usually leveraged at four-to-one during market hours.
This means that only 25% of cash would be required to purchase or short a marginable stock.
Individual brokerages may apply margin restrictions on specific stocks due to volatility and short
interest. It is very important for a trader to double check the maintenance margin requirements on
the stocks that they are trading in the account. In a worst0case scenario, it is possible to get short-
squeezed and experience a forced liquidation from an intra-day margin call.
This account is prepared to ascertain the net profit / loss of a business during an
accounting period. The profit and loss account is a statement that summarizes the revenue and
expenses of an accounting period so as to reflect the changes in various critical areas of a firm's
operation
The Profit and Loss Account is prepared for ascertaining whether the business earned
profit or incurred loss during a particular period of time called accounting period. All nominal
accounts are entered into Profit and Loss Account. As a rule, all expenses and losses are shown
6
on the debit side and all incomes and gains are shown on the credit side of the Profit and Loss
Account.
Then, the totals of debit side and credit side are compared for ascertaining profit or loss
of the business during the accounting period. If the total of credit side exceeds the total of debit
side, the excess will be profit earned during the period.
On the contrary, if the total of debit side exceeds the total of credit side, the excess will be
loss incurred during the period. The net result, whether profit or loss, is transferred to the
Balance Sheet also called Position Statement.
Let us study how the Profit and Loss Account is prepared. Remember, the first part of the
Profit and Loss Account contains the Trading Account which contains information on opening
stock, purchases, direct expenses and sales.
Balance sheet:
7
The balance statement demonstrates the financial position of a business on a specific
date. The financial position of a business is found by tabulating its assets and liabilities on a
particular date. The excess of assets over liabilities represents the capital sunk into the business,
and reflects the financial soundness of a company.
Having ascertained the operational results, i.e., profit or loss by preparing the Profit &
Loss Account, one final account still remains to be prepared is the Balance Sheet. The Balance
Sheet is primarily prepared to know the financial position of the business.
Hence, the Balance Sheet is also called Position Statement. In other words, the Balance
Sheet shows what the business owns and what it owes to others, or say, how much assets and
how much liabilities it has. As already mentioned, all nominal accounts i.e., accounts relating to
expenses, losses, profits, incomes, gains, etc. are shown in the Profit and Loss Account. All
remaining accounts representing personal and real accounts are shown in the Balance Sheet. The
accounts showing debit balances represent assets and the accounts showing credit balances
represent liabilities.
All assets and liabilities are, then, shown on their respective sides in the Balance Sheet.
Like Trial Balance, the total of asset side should be equal to the total of liability side. The reason
being the double entry passed for every transaction. For every debit entry, there is an equal and
corresponding credit entry and vice versa. However, if the two totals do not tally, it implies that
some errors have been committed in the books of accounts. These errors need to be traced out
and, then, rectified.
The preparation of the Balance Sheet is illustrated with the help of our imaginary Trial
Balance given earlier.
8
Now, you have noticed that each account appearing in the Trial Balance is shown either
in the Profit and Loss Account or in the Balance Sheet. As a rule, all nominal accounts appeared
in the Trial Balance are shown in the Profit and Loss Account and all personal and real accounts
are shown in the Balance Sheet.
9
Financial statement of canara bank for five years:
BALANCE SHEET AS ON MARCH 31ST 2012
10
PROFIT AND LOSS AS ON MARCH 31ST 2012
11
crores) crores)
EQUITY SHARE CAPITAL 443.00 CASH AND BALANCE WITH 165,405.93
RESERVE BANK OF INDIA
12
BALANCE SHEET AS ON MARCH 31ST 2014
13
OTHER LIABILITIES & 14,348.29 NET BLOCK 1,143.31
PROVISIONS
TOTAL LIABILITIES 486,423.6 OTHER ASSETS 12,555.85
1
TOTAL ASSETS 486,423.61
14
BALANCE SHEET AS ON MARCH 31ST 2015
15
INCOME Rs( in EXPENSES Rs( in
crores) crores)
43,750.0 INTEREST EXPENDED 34,086.37
INTEREST EARNED
4
4,550.25 OPERATING EXPENSES 7,263.56
OTHER INCOME
PROVISIONS AND 4,247.74
CONTINGENCIES
48,300.2 45,597.67
TOTAL INCOME TOTAL
9
16
crores) crores)
EQUITY SHARE CAPITAL 542.99 CASH AND BALANCE WITH 20,664.05
RESERVE BANK OF INDIA
17
Conclusion:
In the above data we have seen the five years of final accounts of canara bank of India, lets see
the comparison between them
1. Balance sheet:
On comparing 2012 2016, there was an huge increase as in 2015 the total was
542,594.71 but in 2016 it was 547,516.12(crores)
2012 372,095.06(crores)
2013 410,309.36(crores)
2014 486,423.61(crores)
Income
18
2015 48,300.29 (crores)
Expenses
Results:
While comparing the profit and loss account income is greater while compare to expense
19
References:
http://www.canarabank.in/balance_sheet_year_wise%2012_to_2016
https://en.wikipedia.org/wiki/Final accounts
http://www.yourarticlelibrary.com/accounting/final-accounts/final-accounts-profit-and-
loss-account-and-balance-sheet/41172/
20