Podcast
Questions and Answers
Schedule III outlines requirements for financial statements of companies.
Schedule III outlines requirements for financial statements of companies.
True (A)
Accounting standards are notified by ICAI.
Accounting standards are notified by ICAI.
False (B)
Disclosure of the source of bonus shares is required by Schedule III.
Disclosure of the source of bonus shares is required by Schedule III.
False (B)
Schedule III is applicable to the Balance Sheet and Profit and Loss Account.
Schedule III is applicable to the Balance Sheet and Profit and Loss Account.
Schedule III requires disclosure of bonus shares issued in the last 10 years.
Schedule III requires disclosure of bonus shares issued in the last 10 years.
Other statutory requirements are not related to financial statements.
Other statutory requirements are not related to financial statements.
The full value of work in process must always be disclosed in financial statements
The full value of work in process must always be disclosed in financial statements
Schedule III was updated in 2012.
Schedule III was updated in 2012.
Financial statements are prepared for internal use only.
Financial statements are prepared for internal use only.
The requirements for schedule III are at the discretion of the business preparing financial statements.
The requirements for schedule III are at the discretion of the business preparing financial statements.
Flashcards
Accounting Standards
Accounting Standards
A set of rules and guidelines that companies must follow when preparing their financial statements.
Financial Statements
Financial Statements
Includes the Balance Sheet, Profit and Loss Account, and other statements, prepared to provide a snapshot of a company's financial performance and position.
Schedule III
Schedule III
A prescribed format for presenting financial statements as per the Companies Act, ensuring uniformity and comparability.
Disclosure of Bonus Shares
Disclosure of Bonus Shares
Signup and view all the flashcards
Disclosure of Work in Process
Disclosure of Work in Process
Signup and view all the flashcards
Study Notes
- Financial statements of companies stem from:
- Requirements of Schedule III to the companies act, 2013
- Accounting standards notified by MCA
- Other Statutory Requirements
Example 1
- In the financial year 20X1-20X2, Alpha Ltd. mentioned in the notes to accounts that 24,000 equity shares of ₹10 each were issued as fully paid bonus shares however, the source was undisclosed
- Schedule III has come into force for the Balance Sheet and Profit and Loss Account for the financial year commencing on or after April 1st, 20X1
- Part 1 of Schedule III states that a company should disclose in notes to accounts for the period of 5 years preceding the balance sheet date the aggregate number and class of shares allotted as fully paid-up bonus shares
- Schedule III does not require a company to disclose the source from which bonus shares have been issued therefore, the non-disclosure does not violate Schedule III to the Companies Act
Example 2
- Loyal Ltd.'s management believe the work in process is not valued since it is difficult to ascertain and opening and closing work in process would be the same
- Accordingly, the management had not separately disclosed work in process in its financial statements.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
