notes chapter 1 fa 3

8/6/2019 Notes Chapter 1 FA 3

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1.0FINANCIAL STATEMENT FOR THE YEARA limited company especially a public limited company needs to prepare two sets offinal accounts one for internal use and another for external use. For internal use arefor presentation to the companys management (BOD) and those for external use arefor filling the Registry of Companies and publication.

The Companies Act requires the audited financial statements of the company to beprepared every calendar year, at intervals of not more than fifteen months and to laybefore the company at its Annual General Meeting financial statements made up to adate not more than six months before the date of the meeting.

Final accounts for both internal and external use consist to the following:

a. Trading, Profit and Loss and Appropriation Account;b. Balance Sheet; andc. Cash Flow Statement. (Chapter 4)

Section 169 of the Companies Act 1965 lists out Ninth Schedule the information to bedisclosed in these two statements. The Ninth Schedule of the Companies Act 1965and the various Financial Reporting Standards specify the minimum information to bedisclosed in the annual financial statements of companies presented to external users.

The financial statements that are prepared and presented have to comply with theaccounting standards that are in force in Malaysia. The Malaysia AccountingStandards Board (MASB) is now responsible for issuing the standards. At present, theMASB has issued a number of accounting standards called Financial ReportingStandards (FRSs) which are similar to the International Financial Reporting Standards(IFRs) and some of the Malaysia Standards. FRSs are for public entities. Private

entities may apply FRSs or Private Entity Reporting Standards (PERs).

1.1Trading, Profit and Loss and Appropriation AccountFinancial Reporting Standard 101 - Presentation of Financial Statements dealwith the presentation of general purpose financial statement. There is nospecific standard format to be adopted for financial report. But it is advisable toadapt to the standard format for external use as set by the AccountingStandards and Companies Act, so that later it can easily be converted into the

format for external use. The suggested format is given below:


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a. T FormatCompany Name

Trading and Profit and Loss Account for the year ended ____

Notes RM Notes RMOpening stock xxx Sales xxx

Purchase xxx - Return Inward xx- Return Outward (xxx)

xxxCarriage inward xx_ xxx

xxx- Closing stock (xx)COGS xxxGross Profit xxx

xxx xxx=== ===

Less : Expenses Gross Profit xxx

Add : Revenueeg : Depreciation xx Receivable Rental xx

Salary xx Receivable discount xxDiscount allowed xx Investment Interest xxCarriage outward xxUtility xxLoan Interest xxDebenture Interest xxBad Debt xxNett profit xx

xxx xxx

=== ===Tax xx Nett profit xxProfit after tax xx ___

xxx xxx=== ===

Company NameProfit and Loss Appropriation Account for the year ended ____

Appropriation: Profit after tax xxInterim dividend Retained earning (b/d) xx

- Ordinary share xx- Preferred share xxPropose dividend

- Ordinary share xx- Preferred share xx

Reserve transferred xxWritten off good will xxRetained earning (c/d) xx ___

xxx xxx=== ===


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Balance Sheet As At _____________

Notes RM Notes RM

Fixed Asset Authorized Share Capital

Building xx Ordinary Share xxVehicle xx Preferred Share xxMachine xx ==

Issued and Paid Up Capital

Investment xx Ordinary Share xxGoodwill xx Ordinary Share xx

Current Asset Share Premium xxRetained Earning (c/d) xx

Debtors xx General Reserve xx

Bank xxCash xx Current LiabilityUtility Prepayment xx

Creditors xxAccrued Salary xx

Long Term Liability

Loan xxDebenture xx

___

xxx xxx=== ===


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b. Statement FormatCompany Name

Income Statement and Appropriation for the year ended ____

Notes RM RM RMSales xxx- Return Inward xx

xxx

Opening stock xxxPurchase xxx- Return Outward (xxx)

xxxCarriage inward xx_ xxx

xxx- Closing stock (xx)COGS xxxGross Profit xxx

Add : RevenueReceivable Rental xxReceivable discount xxInvestment Interest xx

xxxLess : Expenseseg : Depreciation xx

Salary xxDiscount allowed xxCarriage outward xxUtility xx

Loan Interest xxDebenture Interest xxBad Debt xx_ (xxx)Nett profit xxx

Tax (xx)Profit after tax xx

Retained earning (b/d) xxxxx

Appropriation:

Interim dividend- Ordinary share xx- Preferred share xx

Propose dividend- Ordinary share xx- Preferred share xx

Reserve transferred xxWritten off good will xx (xx)Retained earning (c/d) xxx

===


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Balance Sheet As At _______________

Notes RM RM RMFixed AssetBuilding xx

Vehicle xxMachine xx

Investment xxGoodwill xx

xxxCurrent AssetDebtors xxBank xxCash xxUtility Prepayment xx

xxxCurrent LiabilityCreditors xxAccrued Salary xx xx

Working Capital xxxxx===

Authorized Share CapitalOrdinary Share xxPreferred Share xx

===

Issued and Paid Up CapitalOrdinary Share xxOrdinary Share xx

Share Premium xxRetained Earning (c/d) xxGeneral Reserve xx xx

Long Term Liability

Loan xxDebenture xx

xxx===

notes chapter 1 fa 3

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