1. Check that all current year opening bal. matches with previous year closing balances. 2.

Check for difference in Trial Balance (if any). (Debit should be equal to credit) 3. Check that previous year transfer of Profit to General Reserve entry has been passed. (Can verify it out by checking from physical / printed balance sheet General Reserve amount & your tally account) 4. Normally sufficient Advance Tax needs to be already paid in the current year for its liabilities, so many a times Advance Tax for Previous Year is always greater than Provision for Taxation for previous Year. So the additional Advance Tax can be adjusted to P & L A/c or can be treated as Advance Tax Refundable A/c. Eg. Provision for Taxation A/c Dr. Rs. 90,000/To Advance Tax for F. Y. (Previous Year) Cr. 1,00,000/Advance Tax Receivable A/c Dr. Rs. 10,000/(Here you can use P & L A/c & whenever excess amount comes from govt. you can credit it to P & L A/c) 5. In Current Year - Check for Provisions & Statutory liabilities Op. Cr. Bal. (i. e. provisions & liabilities of last year has to be paid in current year) & make sure that they have been paid in current year. (If not yet, try to pay in current year {finalizing year}) 6. If company has branches & had incorporated JV for branch closing data in master data in previous year (as done in TCG-Mumbai balance sheets), you first have to pass De-incorporation JV in current year opening date. (Incorporation entry includes Assets, Liabilities, Incomes & Expenses of branch, whereas de-incorporation entry includes only Assets & Liabilities of branch that you have incorporated last year.) All of the above (1 6) are Primary Steps 7. Now can move actually twrds current year. So check for all of the ledgers & try to close them properly. 8. First check Sales Register & Purchase Register & make sure that all entries have been entered. 9. Check Suspense A/c & then move to Debtors, Creditors, Loans & Advances, Expenses & Incomes. 10. Gross-up Wages & Salaries. 11. Make Sure that Stock is properly valued otherwise for manual adjustments leave it at end. 12. After these normal items, check that Interest properly provided on Unsecured & Secured Loans. 13. Check & match Duties & Taxes A/cs. (VAT, CST, Service Tax, etc.) with liability to pay & actual payment as per challans. 14. 01) Reconcile Cash A/c & 02) Check Bank A/cs (Also all Bank Loan A/cs incl. Vehicle Loan, Term Loan, CC, etc.) & confirm that it reconciles with Bank Statement for last year. (make sure that receipts cleared within time & no cheque uncleared beyond 6 months {3 months from April, 2011}) 15. Provide Depreciation for Fixed Assets. (As per Companies Act (for Companies) or as per Income Tax Act (for Individuals, Partnership Firms, etc.) as applicable) 16. Make Provision entry for outstanding tax amount. Eg. VAT @ 5% A/c Dr. Rs. 10,000/VAT @ 12.5% A/c Dr. Rs. 15,000/To VAT Payable A/c Cr.

Rs. 25,000/-

(Make sure that the provision will be paid in next year & submit the Challans with Balance Sheet for amount paid in next year)(Same in cash of other taxes like VAT, CST, Service Tax, etc.) 17. Make Accrual Entry for Interest on Fixed Deposit with Bank as per their FD Statement. Eg. Bank FDR A/c Dr. Rs. 1,00,000/To Interest on Bank FDR Cr. Rs. 1,20,000/TDS on Interest on Bank FDR Dr. Rs. 20,000/18. Make Provision for Auditors Remuneration if required. Eg. Auditors Remuneration A/c To Provision for Auditors Remuneration

Dr. Cr.

Rs. 1,00,000/Rs. 1,00,000/-

19. Then arrange the balances in Balance Sheet format. (Vertical for Ltd. Co. {with proper Fixed Asset Schedule} & horizontal for others) [See my files for Format, Ramakant\Finalisation\TCG Balance Sheet & P&L 2009-10.xls] 20. Make final Provision for Taxation @ 30.90% for Ltd. Co. Eg. P & L A/c Dr. Rs. 10,00,000/To Provision for Taxation Cr. Rs. 10,00,000/21. Previous Year Adjustment incl. entries adjustment made in P & L A/c ledger. (Other than current year Provision made & trf. To General Reserve for current year) 22. Make P & L Appropriation. (i.e. transfer to General Reserve & P & L A/c) Eg. General Reserve A/c Dr. Rs. 50,00,000/To P & L A/c Cr. Rs. 55,00,000/(Balance wil automatically remain in P & L A/c)