I want to know the complete accounting procedure for companies from journal entry to finalization of accounts please give me the detailed process in accounting for the software company in India.
Narendra from India
Narendra! There is no difference of accounting procedure for companies. We maintain the accounts of companies like maintaining the accounts of individual or partnership business. All the journal entries are passed on the basis of double entries system. We also create individual accounts in ledger book. But in company type of business, we have to follow some rules and regulations of company law. For example, for companies, income tax will be its indirect expense and it will be debited in the profit and loss account when we will make its final accounts. We also make one more account during the finalization of accounts and its name is profit and loss appropriation account which is not made in individual or partnership type business.
To make this account is necessary for transferring some net profit to dividend, reserves and other funds and other adjustments.
Both balance sheet and income statements are made on the basis of given format by company law. We have to follow its format.
Related : Financial Statement of Companies