FINAL ACCOUNT

The last piece of the puzzle.

Accounting cycle
• Financial • Journal
Statements

Reporting Recording

Summarization Classification

• Trial • Ledger
Balance
Recording Process
Recording cycle
Trial Source
Balance Document

Ledger Voucher

Journal
Preparing the Final Accounts
Two Financial Report

Profit and Loss – The Short Balance Sheet – The Big Picture
Picture
Difference between Two Report
Profit And Loss
• Show us Our Yearly Performance
• Profit Or loss for a year

Balance Sheet
• The State of affair of co up till now
• The Financial Snapshot can be
for any moment of time
The Final Account Process

Profit & Loss

• Income • Asset
• Expense • Profit • Liabilities
• Loss +Capital
Balance
Transferred
Sheet
Closing of Expenses at year end
Expense Recording Transfer To Profit and loss

• Debit Office Stationary • Debit Profit & Loss 5000

5000 • Credit Office Stationary
• Credit Cash 5000 5000
Closing of Income at year end
Income Recording Transfer To Profit and loss

• Debit cash 1000 • Debit Sales 1000

• Credit Sales 1000 • Credit Profit and loss
1000
Outcome of Profit and loss
If Income more
than expenses
–Profit Credit
wins
If expenses more
than income
–Loss Debit
Wins
Trading and profit and loss Account
Trading and Profit and loss
classification

Trading
Profit And Loss
Account
Direct Income Indirect Income

Direct Expense Indirect Expense

Trading account format
Last Year
closing Stock

Income

Asset
Purchase
Transportation
Direct Labor
attributable to
Selling
Closing stock Logic
Day Beginning Purchase End of the day

10 50+10 Closing
Available Stock 15
For Sale (60-15)=45
60 Good Sold
Steps in trading account

GOODS
AVAILABLE
FOR SALE
Minus Closing
stock
Cost of good sold

Sale- Cost of good sold=

Gross Profit/Loss
GORDON BLAIR CAFE
Trading and profit and loss Account
Trading Account
Trading Account
Trading Account
Trading Account
Trading Account
Trading Account
Trading Account
PROFIT & LOSS
ACCOUNT
Profit and loss Account
Profit and loss Account
Profit and loss Account
Profit and loss Account
Profit and loss Account
Profit and loss Account
Profit and loss Account
BALANCE SHEET
Accounting Equation

ASSET
Liabilities CAPITA
L
Accounting Equation
Resources Money Trail of Assets

Asset
used by
entity Resources

Liability
Borrowed
Resources

Capital
owned
Classification Of Asset

Asset Liabilities
Current-life Within Current-Payable
One Year within one Year

Non Current-Life Non Current-Payable

more than One year beyond One Year
Balance Sheet
Balance Sheet
Balance Sheet
Balance Sheet
Balance Sheet