ASST PROF. JONLEN DESA

This section deals with the books of accounts to be kept by a company.

Every company shall keep at its registered office proper books of account with respect to:

a. All sums of money received and expended by the co. and the manner in respect of which the receipt and expenditure takes place;

b. All sales and purchases of goods by the company;c. the assets and liabilities of the company;

d. incase, the company is engaged in production, processing, manufacturing or mining activities, particulars relating to utilization of material or labour or to other items of cost, such companies are required to include such particulars in their books of account as required by the Central Government.

The BOD of the company may decide to keep the books of accounts at any other place. However, within 7 days, they should file with the registrar a notice in writing giving full address of that other place.

Every company shall prepare and keep books of accounts, financial statements and other relevant books or papers for every financial year at the registered office of the company.

The books of accounts shall give a true and fair view of the state of affairs of the company.

They should be prepared on accrual basis and following the double entry system.

Books can be kept at any other place in India, but it requires a board resolution to be passed within 7 days with the registrar, giving full address of that other place.

All books of accounts shall be open to inspection by any director during the working hours.

The amount of depreciation to be deducted shall be the amount calculated with reference to the written- down value of the assets as shown by the books of the company at the end of the financial year and at the rate specified in Schedule XIV.

Provided that if any asset is sold, discarded, demolished or destroyed for any reason before depreciation of such asset has been provided for in full, the excess, if any, of the written- down value of such asset over its sale proceeds or, as the case may be, its scrap value, shall be written off in the financial year in which the asset is sold, discarded, demolished or destroyed.