Finalization of Books of Account
- Art Teacher
- London, UK
- 5-7 Hrs
At Aarthika Globcorp Solutions, we provide expert support in the Finalization of Books of Account, a crucial year-end process where every ledger, transaction, and balance is reviewed, reconciled, and closed for the financial year to ensure accuracy and compliance. This process acts as the final edit of your business’s financial story, preparing it for presentation through financial statements while ensuring that all incomes, expenses, assets, and liabilities are correctly recorded as per accounting standards and legal requirements. Finalization helps identify pending adjustments such as accruals, provisions, depreciation, and write-offs, setting the foundation for accurate tax filing and providing stakeholders and investors with a transparent view of business performance. For companies, it is a statutory requirement under the Companies Act, 2013 and must be completed before the statutory audit, while for small businesses, skipping this step can lead to tax errors, compliance issues, and financial mismanagement.
- Trial Balance (adjusted and unadjusted)
- General Ledger & Subsidiary Ledgers
- Bank Statements & Bank Reconciliation Statements
- Purchase & Sales Registers
- Expense Bills & Vouchers
- Fixed Asset Register with depreciation details
- Stock/Inventory records with valuation reports
- Loan & Liability confirmation statements
- Debtor & Creditor confirmations
- Tax computation sheets (GST, TDS, Income Tax)
- Previous year’s audited financial statements
- Collect & Review Data – Gather all accounting records and ledgers.
- Reconciliation – Match balances with bank statements, supplier/customer confirmations, and tax records.
- Adjusting Entries – Record accruals, prepayments, provisions, depreciation, and error corrections.
- Stock Valuation – Verify inventory quantities and apply appropriate valuation method.
- Tax Computations – Calculate GST, TDS, and income tax liabilities.
- Prepare Financial Statements – Finalize Profit & Loss Account, Balance Sheet, and Cash Flow Statement.
- Management Review – Get approval from management before closing books.
- Lock the Period – Prevent further backdated entries after finalization.
FAQs
Finalization of accounts is mandatory for companies under the Companies Act, 2013, but for other businesses, it's generally a best practice, not a strict legal requirement.
Provision for doubtful debts is not legally compulsory under Indian GAAP for all entities, but it's a standard accounting practice to ensure true and fair financial statements.
Yes, finalization can be revised after filing tax returns by submitting a revised return within the allowed deadline (usually by 31st December of the relevant assessment year or before completion of assessment).
Under the Companies Act, 2013, books must be finalized and financial statements adopted at the Annual General Meeting, which must be held within six months from the end of the financial year (i.e., by 30th September).
GST input credit is treated as a current asset in final accounts and is set off against output GST liability; any unutilized ITC is shown in the Balance Sheet under current assets or claimed as a refund if eligible.
Input tax credit (ITC) reversal is mandatory in GSTR-10 for stock and capital goods held on the date of cancellation.