Final Accounts

Final Accounts

Notes

Final Accounts

Final account is the final process of accounting. It is an accounting process, which is prepared at the end of the given period of time. This note has information about final accounts.

Trading Account

Trading account is the first step of final accounts. It is prepared with a view to determine the amount of gross profit or gross loss made by the business during he given period of time. This note has information about trading account.

Profit and Loss Account

Profit and loss account is the second step of final accounts. Profit and loss account is a financial statement, which helps to know the operating result of the business. It is prepared in the form of ledger. This note has information about profit and loss account.

Balance Sheet

Balance sheet is a statement of assets, capital and liabilities of the business. It is the statement, which depicts the financial position of the business on a particular date. This note has information about balance sheet.

Items Included in Balance Sheet

Balance sheet contains the items off capital, liabilities and assets. It is the statement which shows the financial picture of the business organization. This note has information about the items included in balance sheet.

Adjustments in Final Accounts

The transactions, which do not appear in the trial balance, are to be noted as adjustments. The adjustment transactions represent such items of incomes and expenditures, which relate to the current year and have not yet been brought into the book of accounts. This note has information about adjustments in final accounts.

Items Included in Profit and Loss Account

Profit and loss account is prepared in the form of ledger and hence it contains two sides: debit and credit. It is prepared by transferring the gross profit from trading account to its credit side. If there is gross loss, it is transferred to its debit side. This note has information about items included in profit and loss account.

Items Included in Trading Account

Trading account contains the items relating to stock, purchases, sales, direct expenses and manufacturing expenses. Trading account is prepared in the form of ledger. Hence, it contains debit and credit sides. This note has information about the items included in trading account and the procedures of preparing the trading account.