Welcome to today’s class!!
We are thrilled to have you in our class!!
In today’s Store Management class, we will be learning about Meaning of Final Account
Meaning of Final Account
Final accounts are those accounts that are prepared by a joint stock company at the end of a fiscal year. The purpose of creating final accounts is to provide a clear picture of the financial position of the organization to its management, owners, or any other users of such accounting information.
Final accounts are an integral part of a financial accounting year for every business. In other words, it is the end product of the accounting process carried out the whole year.
Final account preparation involves preparing a set of accounts and statements at the end of an accounting year. The final account consists of the following accounts:
- Trading and Profit and Loss Account
- Balance Sheet
- Profit and Loss Appropriation account
Objectives of Final Account preparation
Final accounts are prepared with the following objectives:
- To determine profit or loss incurred by a company in a given financial period
- To determine the financial position of the company
- To act as a source of information to convey the users of accounting information (owners, creditors, investors and other stakeholders) about the solvency of the company.
Format of Trading Account
|Trading Account of M/s ABC Limited
(For the period ending 31-03-2023)
|To Opening Stock||XX||By Sales||XX|
|To Purchases||XX||By Closing Stock||XX|
|To Direct Expenses||XX||By Gross Loss c/d||XXX|
|To Gross Profit c/d||XXX|
In summary, Final accounts are those accounts that are prepared by a joint stock company at the end of a fiscal year.
Explain the importance of a Final Account
What are the steps involved in preparing a Final Account?
A final account consists of how many other accounts? List them
We hope you enjoyed today’s class. In our next class, we will be talking about the Meaning of Balance Sheets.
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