a) Cash received and expended by the company
b) Sales and purchases of goods by the company
c) All Assets and liabilities of the company; and
d) In case of a company engaged in production, processing, manufacturing, or mining activities, a production record as may be required by the Commission through a general or special order
Books of account should be preserved for ten years; Books of account are to be kept at the registered office of the company. If kept at any other place, the registrar should be informed; Books of account should give a true and fair view of the state of affairs of the company and should contain explanation of transactions. Directors can inspect the books of account during the business hours. If company fails to comply with the above provisions a director, including chief executive and chief accountant:
(a) of listed company is liable to imprisonment for one year and a fine of not less than Rs. 20,000 not more than Rs. 50,000, and a further fine of Rs. 5000 per day during which the default continues; or
(b) of other companies is liable to imprisonment for six months and with a fine, which may extend to Rs. 10,000
Accounting Cycle
• Transaction
• Document
• Voucher
• Books of original entry/journal/day book
• Books of secondary entry/ledger
• Financial statement
Transaction Source Document
Sale Invoice Issue
Purchase Invoice Receive
Sales return Credit Note Issued
Purchases return Credit Note Received
Cash received Receipt/Cash Memo Issue
Cash paid Receipt/Cash Memo Received
Lease/Hire Purchase Agreement
Voucher
• Receipt voucher
• Payment voucher
• Journal voucher
• Petty cash voucher
Books of Original Entry
• Purchase journal
• Sale journal
• Purchase return journal
• Sales return journal
• Cash book (two/three column)
• Petty cash book
• General journal/ transfer journal
Books of Secondary Entry
• Main ledger
• Subsidiary ledger
Financial Statement
• Balance sheet
• Income statement
• Statement of changes in equity
• Cash flow statement
• Notes to the accounts
