Accounting for limited companies

The accounting rules and conventions for the recording of business transactions of the limited liability company and then prepare the final budget is more or less the same as for a sole trader. For example, companies will have a cash book, sales day book, purchase day book, journal, sales ledger, purchase ledger and accounting. They will also prepare a profit and loss account each year and a balance sheet at year-end accounting.

They are, however, some differences in the accounts of limited liability companies, of which the following are perhaps the most significant.

• The legislation governing the activities of a limited liability company is very large. Among other things, the Company shall proceed to define certain minimum records that must be managed by companies. They state that the annual accounts of companies must be field with the register of companies and therefore available to the public. They contain detailed requirements concerning the minimum information to be published in a companies' financial statements.

• The owners of a company may be very numerous. Their capital is shown in a manner different from that of an individual entrepreneur, and likewise the account ownership of a company is different.

The accounts of limited liability companies

There is a legal requirement for companies to keep records that are sufficient to show and explain the operations of the company. The records must:

• Disclose the current company financial position at any time.

• Contain:
1. Day to day entries of money received and spent.
2. A recording of assets and liabilities of enterprises.
3. If the company deals with goods. A statement of shares held at year end, inventory sheets and supporting. With the expectation of retail sales, the statement of goods bought and sold that identify the seller and the purchaser of such property.

• Enable managers of companies to ensure that the company's accounts give a true and fair view of the results or business losses and the state equilibrium position.

Registers: The law books

A company must also keep a certain number of no records. These include:

• Register of members
• Shareholders 3 percent interest
• Register of fees and a register of bondholders
• Directors and company secretaries
• Register of directors interests

These records are known collectively as the company's books of the company .......