The most important asset for banks is “loans and advances” comprising cash credits and overdrafts, bills discounted and purchased and term loans. The banks have to classify their advances as follows in order to arrive at the amount of the provision to be made against them, into the following groups:- 1. Standard Assets 2. Sub-Standard Assets 3. Doubtful Assets and [...]
Here is a compilation of top four accounting problems on accounts of banking companies with its relevant solutions. Illustration 1: From the following information, prepare the Profit and Loss Account of South Indian Bank as on 31st March, 2004: Illustration 2: The following Trial Balance was extracted from the books of the United Bank of India as on March 31, [...]
Banking companies are required to prepare their Profit and Loss Account according to Form B in the Third Schedule. Form B is in a summary form and the details of various items are given in the Schedules. Form B is given below: