Meaning of Final Accounts
Final Accounts gives an idea about the profitability and financial position of a business to its management, owners, and other interested parties. It is a combination of the following statement: –
- Trading Account
- Profit and loss account
- Balance Sheet
Every businessman started a business to earn some income from it. Profit is the net income that the owner gets from the business. To calculate profit or loss, An accountant has made the final accounts for the business for a particular accounting period(i.e. One year starts from 1st April and ends 31st March).
On the basis of the Trial balance, An accountant prepared the final accounts or financial statement for the particular period of time for reporting the management of the business. The final accounts are prepared to throw light on the financial results of the operation of the business during the particular accounting period of time and the financial position of the business at that period of time.
Statement Involve in the Final accounts: –
- 1. Trading Account:-
- 2. Profit and loss account: –
- 3. Balance Sheet: –
Chapter No. 19 – Adjustments in preparation of Financial Statements – Solution
T.S. Grewal’s Double Entry Book Keeping