Академический Документы
Профессиональный Документы
Культура Документы
Prof. P. Kumaresan
SEPTEMBER 2016
TIRUCHIRAPPALLI 620 009
Declaration
INDEX
1. INTRODUCTION
2. OBJECTIVE
3. METHODOLOGY
4. DEFINITION OF FINAL ACCOUNTS
5. GENERAL AND LEGAL REQUIEMENTS
6. PREPARATION AND PRESENTATION OF FINAL ACCOUNTS
7. BALANCE SHEET
8. PROFIT AND LOSS A/C
9. CONCLUSION
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 HDFC for five years (2012
2016) 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. One telecom company i.e. HDFC 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 that bank..
FINAL ACCOUNTS
INTRODUCTION
Since every interested party has a right to information which is merely not the outcome of
statue but is based on the principle of public accountability. The financial statements which
are prepared on the basis of various accounting postulates ,concepts and conventions are
supposed to be endowed with many qualitative characteristics viz understandability,
relevance, materiality, reliability, faithful representation , substance-over-form, neutrality,
prudence , completeness, and comparability.
DEFENITION
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 1956 makes it compulsory for
companies to keep certain books of accounts.
Section 209 also requires that books of accounts must show the true and fair view
of state of affairs of the company. section 211 requires that the balance sheet must
give true and fair view of the state of affairs and profit and loss account must give
true and fair view of the results of operations . It simply implies that financial
statements should disclose every material information without any concealment of
facts and figures and in such a manner that working results and financial position of
the reporting enterprise, may correctly, be interpreted in true sprits. It should be free
from personal biases and mis-statements. It will be possible only if financial
statements are prepared in accordance with generally with generally accepted
accounting principles and in conformity with the various accounting standards as
applicable to the reporting enterprise, may correctly be interpreted in true sprits. It
should be free from personal biases and mis-statements. It will be possible only if
financial statements are prepared in accordance with generally accepted accounting
standards set by ICAI. In case company fails to comply with any of generally
accepted accounting assumptions or standards, the fact should be disclosed.
As already stated, the board of directors of the company shall present the following at
the annual general meeting:
Similarly every balance sheet shall give a true and fair view of the
state of affairs of the company as per schedule 6 any insurance or banking
company engaged in generation or supply of electricity or any other class of
company need not to follow such form.
If the company does not disclose any change in policy, the fundamental
assumptions such as going concern, consistency and prudence have been adhered
to.
The final accounts are primarily prepared for ascertaining the operational result and the
financial position of the business. These are prepared with the help of Trial Balance.
2. Balance Sheet.
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 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
Taking our previous Illustration 1 here again, 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.
2. BALANCE SHEET:
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 shows what the business owns and what it owes to others, or say, how much assets and
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
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
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
Study of financial position for last five years of HDFC with help of their
final accounts for last five years
HDFC
HDFC BANK
Type Public
Website HDFCBank.com
History
In 1995 HDFC Bank was incorporated, with its registered office in Mumbai, India. Its first
corporate office and a full service branch at Sandoz House, Worli was inaugurated by the then
Union Finance Minister, Dr. Manmohan Singh.
As of June 30, 2016, the Banks distribution network was at 4,541 branches and 12,013 ATMs.
Acquisitions
HDFC Bank merged with Times Bank in February, 2000. This was the first merger of two private
banks in the New Generation Private Sector Banks category. In 2008, Centurion Bank was
acquired by HDFC Bank. HDFC Bank Board approved the acquisition of CBoP for Rs. 9,510
crore in one of the largest mergers in the financial sector in India.
The equity shares of HDFC Bank are listed on Bombay Stock Exchange and
the National Stock Exchange of India. Its American Depository Shares are listed
on NYSE and the Global depository receipt are listed on the Luxembourg Stock
Exchange where two GDRs represent one equity share of HDFC Bank.
ADS/GDRs 18.78%
Balance sheet:
MARCH 31ST 2012
Conclusion:
In the above data we have seen the five years of final accounts
of HDFC BANK, lets see the comparison between them
1. Balance sheet:
On comparing 2012 2013, there was an huge increase as in 2012 the total
was 400,331.90 but in 2013 it was 62,422.4 (million)
2013 62,422.40(millions)
Income
Expenses
Results:
HDFC has earned profits for all the five years. The company has earned profits at a healthy
rate for the time period between 2012 to 2016. In accordance with the increasing profits and
the increasing scale of operations, the expenses have also increased manifold.
References
https://en.wikipedia.org/wiki/Final_accounts
http://www.yourarticlelibrary.com/accounting/final-accounts/final-accounts-profit-
and-loss-account-and-balance-sheet/41172/