Final Accounts are the accounts that are prepared to find the final estimate of the profit and loss of a company for a certain accounting period. Final accounts are used to describe the final position of the business.
Final accounts are the accounts that are finally prepared at the end of the particular accounting period. These accounts trade profit and loss in the balance sheet of the company for that particular period. In order to prepare final accounts we need a few objects that are described as below.
Objective for Preparing Final Accounts
- Final accounts are objected to ascertain the financial position of the business. These accounts are used to ascertain profit and loss of the business
- Final accounts also present the financial position of the business in more clear and transparent way.
- With the help of the final accounts the results of the transaction are finalized with the help of trading and profit and loss statement or the income statement of the company.
- The final financial position of the business is depicted with the help of the balance sheet of the company.
The period at the end of which the final accounts are prepared is called the accounting period. The basis of the final accounts is the trail and balance calculation as each final account is prepared with the help of trial and balance calculation.
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