Overview of Final Accounts Preparation in Business
Final accounts preparation involves creating the Income Statement or Profit and Loss Account to determine profit or loss, and the Balance Sheet to show the financial position of a company. The objectives include conveying information to stakeholders and assessing solvency. These financial statements help in analyzing the company's performance over a specific period and provide crucial insights for decision-making.
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. Download presentation by click this link. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
E N D
Presentation Transcript
Preparation of Preparation of Final Accounts Final Accounts
INTRODUCTION INTRODUCTION The The progress progress. . estimating estimating the and and financial financial status unit unit prepares prepares final financial financial position position and Balance Balance Sheet Sheet . . Thus, business business progress progress are stakeholders stakeholders The The the impact status of final accounts business business of of of business business activities of the the business business. . For accounts. . The The final and financial financial status Thus, the the final final accounts are as as follows follows: : of of a a interested interested progress progress on financial financial position For this this purpose, purpose, a a business final accounts accounts which which portray status are are Income Income statement accounts prepared prepared to are are financial financial done done position business portray the statement and to estimate estimate in in is is assessment assessment impact of financial financial activities on by by the and
Objectives of Final Account Objectives of Final Account preparation 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.
Income statement or Profit and Income statement or Profit and Loss Account Loss Account Profit and loss account reveals the results of the business firm s activities for an accounting period. It includes the income and expenditure of a firm over a period of time and then by comparing such incomes and expenditures represents the amount of profit and loss for the period. If income exceeds expenditure, the difference is called net profit and in case expenditure, exceeds income the difference is called net loss. The profit and loss account is also called as Income statement. gives a final figure which
Balance Sheet Balance Sheet A balance sheet is a financial statement that reports a company's assets, liabilities and shareholders' equity at a specific point in time, and provides a basis for computing rates of return and evaluating its capital structure. Balance sheet maybe defined as a statement of assets and liabilities of the company at a particular date. Balance sheet is prepared and prescribed in Schedule III, Part I of the Companies Act,2013. The form prescribed is vertical. Balance sheet must exhibit a true and fair view of the financial position at the close of the year. presented in the form
THANK YOU THANK YOU
