Basic Account Unit 2 Final Accounts
Final Accounts 1. Meaning of Final Accounts Final Accounts are prepared at the end of an accounting year to determine the financial performance and financial position of a business. They help to find out: Whether the business has earned a profit or suffered a loss. What assets the business owns. What liabilities the business owes. The overall financial position of the business. Final Accounts are generally prepared on the basis of the Trial Balance and other adjustments. Definition: Final Accounts are the financial statements prepared at the end of an accounting period to ascertain the net profit or net loss and the financial position of a business. 2. Objectives of Final Accounts The main objectives are: To calculate the gross profit or gross loss. To calculate the net profit or net loss. To determine the financial position of the business. To know the ...