ACCURACY Financial Statements speaks about the financial affairs of a business organization.

Investors look into the financial statements of the company and decide whether to invest in the company or not. Therefore, the financial statements should show clear and accurate data. Financial statements cannot be useful if they have unreliable and inaccurate transactions. Accuracy plays an important role over here. Maintaining accurate books of accounts is essential and mandatory to assess the performance of the company. Accurate and reliable records are of critical importance in meeting our financial, legal and business obligations. Accurate information is essential to meet legal and regulatory obligations and to compete effectively. The records and books of account of the company must meet the highest standards and accurately reflect the true nature of the transactions they record. The Company should have detailed financial accounting policies which must be complied with at all times to ensure that all financial reports and records fairly, completely, and accurately present the Company's results and financial situation. Destruction of any records, books of account or other documents except in accordance with the companys document retention policy is strictly prohibited. One must not create false or misleading documents or accounting, financial or electronic records for any purpose and one may not direct an employee of the company to do so. For example, expense reports must accurately document expenses actually incurred in accordance with the company policies. One must not obtain or create false invoices or other misleading documentation or invent or use fictitious entities, sales, purchases, services, loans or other financial arrangements for any purpose. Employees are also responsible for accurately reporting time worked. No undisclosed or unrecorded account or fund shall be established for any purpose. No false or misleading entries shall be made in the Company's books or

records for any reason. No disbursement of corporate funds or other corporate property shall be made without adequate supporting documentation or for any purpose other than as described in the documents. You must comply with generally accepted accounting principles and the Company's internal controls and financial accounting policies at all times. A good recordkeeping system can be crucial to the success or failure of a business. Thorough and accurate records will put your company in the best position for expense and income analysis, tax preparation, and credit approval.

ACCRUAL BASIS ACCOUNTING Accrual accounting is considered to be the standard accounting practice for most companies. This method provides a more accurate picture of the company's current condition. The need for this method arose out of the increasing complexity of business transactions and a desire for more accurate financial information. Selling on credit and projects that provide revenue streams over a long period of time affect the company's financial condition at the point of the transaction. Therefore, it makes sense that such events should also be reflected on the financial statements during the same reporting period that these transactions occur. In accrual-based accounting, revenue is recorded when it is earned, irrespective of when it is actually received, and expenses are deducted when they are incurred, regardless of when they are paid. This enables better internal control, better quality information for decision making, a more complete and transparent view of the financial position of the business. Many companies that use the accrual accounting method monitor cash flow on a weekly basis to be sure they have enough cash on hand to operate the business.

BANK RECONCILIATION Bank reconciliation happens when you compare your records to the banks records. You go through every transaction in your account and make sure all the transactions are correct in the bank statements also. You should do bank reconciliation at least every month to make sure you know whats happening with your accounts. Without bank reconciliation, you may not have a clear idea of how much cash is available in your account. There are chances of bouncing cheques and incurring overdraft charges. Without bank reconciliation, you also expose yourself to risk. People may be stealing from the account. If you never look through each transaction, youll never know about it. If you dont notify the bank quickly enough, you may lose a lot of cash. The same applies for bank mistakes also. With regular bank reconciliation you can find the problems quickly and solve them at the earliest for perfect financial statements. The bank reconciliation statement is the most common tool used by organizations for reconciling the balance as per books of company with the bank statement and is made at the end of every month. The main objective of reconciliation is to ascertain if the discrepancy is due to error rather than timing.

MONTHLY CLOSING Monthly closing is an accounting procedure undertaken at the end of the month to close out the current posting period. It is part of a company's closing operations. Types of accounting procedures addressed in monthend closing can include: depreciating fixed assets, reconciling inventory discrepancies, settling work in progress material, posting billing documents, and payroll. Month end close is performed to finalize a snap shot of transactional activity for a period. Most processes run at month end are also run on a daily and/or weekly basis. For month end, these processes are performed for the last

time for a particular month to ensure that all transactions are posted and reflected on reports. The month is officially closed when all of the month end processes are complete (including posting). The monthly closing function serves two main purposes. They are: 1. It summarizes the detailed information in the Detailed General Ledger for the current accounting period to a level suitable for efficient responsibility and financial reporting. 2. It maintains the database so that only current and relevant information is maintained.

TAX PROVISION Every company must pay taxes on its income. Accurate and timely tax reportage is necessary for a company to conform to accepted accounting principles (GAAP) and the Internal Revenue Code, as well as raise adequate capital. Favorable tax reform in recent years has made it especially important for business owners to plan in advance for tax deductions and exemptions. Accurate records will be of great assistance with tax planning and filing, can help the company save money, and can provide documentation for all expenditures. Maintaining complete and up-to-date records will be the most advantageous for your company at tax time.

RECONCILIATION OF GROUP COMPANY ACCOUNTS A group of companies is required to prepare accounts for the group as a whole as

well as the company. These consolidated accounts are almost always what matter to investors. These consolidated accounts are often called group accounts and in companies, they have the expertise needed to produce these accounts and complete the audits required in a timely and efficient manner to help in managing the business and fulfill the reporting requirement. The consolidated P & L includes the profits of subsidiaries and the company's share of profits made by associates and joint ventures. If any subsidiary is not fully owned then a deduction will be made further down the P & L for the profits attributable to minority interests. The consolidated balance sheet similarly shows the amounts of assets and liabilities of the company and all its subsidiaries. It also shows the value of holdings in associates and joint ventures. Intercompany reconciliation is reconciling between the two branches of the same company located in multiple locations where one branch acts as seller to other branch when some product is moved from Branch A to B branch. Hence we need to reconcile between these two branches to ensure the right figures appear on the financial statements to the management. Intercompany reconciliation rules balance transactions that occur between different entities in the company. Intercompany reconciliation adjusts for differences in the values that are recorded by the buyer entity and the seller entity for intercompany transactions. If, after adjustments for currency differences, the recorded values do not match, intercompany reconciliation creates balancing entries.