SS2 Second Term Financial Accounting Lesson Note – Final Account of a Limited Liability Company

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WEEK 4

TOPIC: FINAL ACCOUNT OF A LIMITED LIABILITY COMPANY

Final Account: (a)Profit and loss Appropriation Account:  – Uses(b) Appropriation Items (i) Amount written off (ii) Good will (iii) Preliminary expenses (iv) Amount transferred to reserve; (i) Bonuses (ii) Dividends(c) Preparation of profit and loss Appropriation Accounts. (d) The company balance sheet – Layout, Preparation, Analyzing or Interpretation.

CONTENT:

1. Profit and loss Appropriation Account: Uses
2. Appropriation Items (i) Amount written off (ii) Good will (iii) Preliminary expenses (iv) Amount transferred to reserve; (i) Bonuses (ii) Dividends
3. Preparation of profit and loss Appropriation Accounts.
4. The company balance sheet – Layout, Preparation, Analyzing or Interpretation.

Sub – topic 1.  Profit and loss Appropriation Account: Uses

The final accounts contain of:

• Trading account
• Profit and loss account
• Appropriation account
• Balance sheet

Trading account: Trading account of company is not so different from that of the Partnership apart from some peculiar items to Company.

Profit and loss account: There are some items in the company profit and loss account that may be found in neither partnership nor sole proprietorship, such items include: interest payable on debentures and loan, directors fees, audit fees, company tax, dividend paid and proposed and charges relating to previous years.  Despite these, the preparation is still the same.

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