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.

With Sheela Warrier.Duration:6hrs 1min

Notes

Few things covered by us:

Index

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
Seal
Perpetual succession
Limited liability
Ownership and management

Control

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
51%
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
50%
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

Company

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

CPT Exam Exposure

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Redemption of Preference Share & Issue of Debentures

Partnership

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