India New year starting without having previous data


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guyz , i have been first time in practical accounting field,
i am confused from where to start as company does not have any previous data ,
but certainly has not performed well ,
has lots of liabilities of previous year ,
now my question is how and where to adjust previous years unpaid liabilities .
 
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Hi Usair dc

This is like accounting problems I have had in school where the books and records have been destroyed. If there is no previous data then you need to create a set of accounting books now. Record assets and liabilities only when you can prove them and keep a copy of the proof and the offset entry has to go to equity to balance this out. This is not at all easy to do but it is a starting point.

Kat
 

Werner Reisacher

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The question is whether the person in charge of the company really wants you to find out and come up with a clear picture. If the owner of the business is not giving you full support, you are fighting a battle already lost. Been there, done that.
Your initial focus is on "stop the bleeding". Take over the control over "cash". Implement procedures that regulate/limit signatory powers and restrict the use of Credit Cards to certain sectors (gasoline only etc.) Take over control of the incoming mail to avoid that vendor/customer reminders and claims "get lost" in the process. Nobody can purchase without an approved purchase order. In a company, cash/bank signatures/credit cards/ and purchase orders are like the "watering hole" in the jungle. Sooner or later, everybody will show up. Equally important is the billing/receivable department. Have all sales/services been billed. Is somebody lagging in working out the input needed for the billing? Look for company registration documents, tax filings, bank and credit card statements and obtain a credit report You might find existing liens and collection issues
It will take you less time than you think to get a good idea of what is going on. But once again, it only works if the person who has the ultimate decision power of the company is expecting and supporting you to clean up. Otherwise, it will be you who becomes "the problem".
 
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Hi Uzair, you will need a trial balance to start with for the new financial year. The debit side must be balanced the credit side, so that at the beginning of the new financial year your trial balance would be like:
debit credit
—————————-
bank 1000
trade creditors 500
accruals 50
prepayment 10
trade debtors 100
capitals 100
retained profits 460
......
......

Total 1110 1110

This is just giving an idea that you can start with.
 
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