Ours is a very small registered CHS consisting of 8 members who live in 8 flats with family. All the members are retired government officers. We prepare accounts of the Society ourselves without any professional help as it is very simple without any complex matter.
Every year an auditor is sent by state government Co-operative department to audit accounts according to Co-operative Act of West Bengal government. The land on which the building stands was allotted to the Society by the state government some 25 years ago.
Members contributed to the Society at that time in equal proportion for construction of the building.
Fixed assets of the Society are the following items:
3. A Lift and
Current assets are
1. Cash in hand
2. Cash in Bank saving account
3. Fixed deposits
Total asset is sum total of fixed and current assets on the last day of each FY, i,e, 31st March
(Note: We do not take into account depreciation of the fixed assets like building, lift and furniture because their value will become nil after so many years if formula for depreciation is applied.
Land, of course does not depreciate, it appreciates)
Liabilities are the following items:
1. Issued and paid up share capital
2. Members' deposit for construction of the building 25 years ago
3. Arrear audit fee and
4. Accumulated surplus from income over expenditure over the years
(Income exceeds expenditure almost every year)
Source of income are
1. members' monthly fixed amount of maintenance charge for running the Society
2. SB interest
3. Sale proceeds of old discarded items like plumbing materials occasionally
1. Wages of security and sweeper
2. Electricity charges
4. Miscellaneous purchases
5. Audit fee
A cash book, ledgers, voucher register etc.
We prepare for audit the following accounts
1. Cash account
2. Income-expenditure account and
3. Balance sheet
Now, my query is whether total assets will be equal to total liabilities every year in balance sheet? Is it not possible that assets exceed liabilities in some years ? If so, how and where to show it?
Another question is, is it necessary to take into account accrued interest of fixed deposits in balance sheet. If so, is it an asset or a liability?