CPT Chapter Company Accounts

CA CPT syllabus “Company Accounts” explains  the need for a company form of organization, its advantages and disadvantages, types of companies, what are shares, types of shares etc. It includes a brief discussion on the format of a Balance Sheet as per Companies Act 2013. This chapter also explains accounting entries on issue, forfeiture and reissue of shares. Shares are issued to raise equity capital, shares are forfeited when call money is not received and forfeited shares may reissued to make a net gain.

CA CPT Exam  

With Sheela Warrier.Duration:6hrs 1min

Introduction to Company Account & Reissue & Forfeiture  of SharesDuration (min:sec)
Introduction to company Account 
What is Company12:14
Types of Company25:22
Intro to Format of FS01:13
BS as per Schedule 622:15
PL as per Schedule 604:57
Share Capital16:31
Calls in Arrear & Advance02:11
Types of Share10:54
Issue of Shares 
How Shares are Issued05:56
Issue of Share at one instalment07:21
Over and Under Subscription02:17
Issue of share at premium02:15
Using Security premium account03:17
Example-Issue of Share at premium03:23
Issue of Share at discount04:48
Issue of Shares in Instalments12:22
Pro rata allotment11:16
Calls in Arrear10:28
Interest on Calls in Arrear & Advance02:18
Forfeiture of share 
Intro Forfeiture of share03:26
Accounting Entry Forfeiture08:32
Forfeiture of share originally issued at discount06:41
Forfeiture of share originally issued at Premium16:24
Forfeiture vs. Surrender of Share01:09
Examples of Forfeiture06:43
Summary Forfeiture of share01:57
Reissue of Forfeited share 
Intro to Reissue of Forfeited share05:50
Reissue Accounting Entry06:19
Reissue at Premium04:17
Reissue at Discount08:25
Issue of Shares other than cash 
Introduction to Issue of Shares other than cash02:49
Issue of Shares to Owners01:50
Issue of Shares to Vendors10:38
Final Quiz16:34


Few things covered by us:


What is a Company ?
Types of Companies
Format of Financial Statements
Share Capital
Types of Shares

What is a Company

Business organization
Separate legal entity
Own name
Perpetual succession
Limited liability
Ownership and management


Separate ownership and management
Transfer of shares
Books of account
Periodic audit
Right to information

Types of companies

Statutory company
Special Act
Comptroller and Auditor General of India
Ex- Food Corporation of India, National Highway Authority of India

Government company
Subsidiary of Government company
Auditors are appointed by the CAG
Ex- Air India, NTPC

Foreign company
Place of business

Registered company
Companies Act 1956
Companies Act 2013

Subsidiary company
Controls the Board of Directors
Subsidiary of a subsidiary
Subsidiary of foreign company
Holding company
Other company is subsidiary company
Ex- Tata Steel, TCS, Tata Motors are subsidiary of Tata Sons Ltd

Limited Liability Company
Liability limited to the unpaid amount on shares

Unlimited Liability Company
Liability not limited - (at time of liquidation)
Incorporated but unlimited liability
Private company
One lakh
Restriction on number of members
Restriction on transfer of shares

Flipkart Online Services Private Ltd

Public company
Not a Private Company
Five lakhs
Subsidiary of Public Company
No restriction on transfer of shares
Listed company

Accounts and Financial Statements
Schedule III to the Companies Act 2013
(previously Schedule VI to the Companies Act , 1956)

Part I - Balance Sheet

Part II - Profit and Loss a/c

Types of capital

Authorised capital
Issued capital
Subscribed capital
Called up capital
Paid up capital
Reserve share capital

Types of shares

Preference shares
Cumulative and non cumulative
Participating and non-participating
Redeemable and non-redeemable
Convertible and nonconvertible
Equity shares


How are shares issued ?
Issue of shares for cash
At par
At premium
At discount
Oversubscription and Under subscription
Calls in arrear and Calls in advance
Accounting entries
Forfeiture and Reissue of Shares
Accounting entries
Issue of shares for consideration other than cash

Forfeiture of Shares

What is Forfeiture ?
When does Forfeiture of shares occur ?
Articles of Association - BOD
Due notice
No longer member of Company

Reissue of Forfeited Shares

Reissue may be at par, premium or discount
Discount on reissue cannot exceed the amount forfeited
Profit after reissue is transferred to Capital Reserve
Balance in Share Forfeited a/c is added to Share Capital

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