Bank overdraft Credit Liability

Outstanding salaries Credit Liability

Prepaid insurance Debit Asset

Bad debts reserve Credit Revenue

Patents & trademarks Debit Asset

Prepaid rent (received) Credit Liability

Motor vehicle Debit Asset

Outstanding rent Credit Liability

 FINAL
ACCOUNTS
Introduction:
The trail balance marks a definite stage in the preparation of
accounts. It indicates the all the transactions for a particular period
have been duly entered in the book, properly posted and balanced.
The agreement of trail balance proves two things: that
1) The record has been made of both the aspects of each transaction;
and
2) The book are arithmetically accurate.

final accounts

Trading & Profit & Loss A/C Balance Sheet

TRADING ACCOUNT, PROFIT & LOSS
ACCOUNT
The first step in the preparation of final accounts is
the preparation of the trading account. The main purpose of preparing
a Trading Account is two-fold :
1)to ascertain gross profit and loss as a result of buying and selling of
goods; and
2) to enable management to make a comparison of gross profit or
gross
loss of the current year with that of previous years.

The Businessman is always interested in knowing his net

income or net profit. Net profit represents the excess of gross profit plus
other revenue incomes over sales expense including sales costs and
other expenses. The debit side of P&L a/c shows the expenses and the
credit side the incomes. If the total of the credit side is more, it will be net
profit. And if the debit side happens to be more, it would be net loss.
BALANCE SHEET
This forms the second part of the Final Accounts. It
is prepared after the trading and profit and loss
accounts have been complied and closed . A
Balance Sheet may be described as a statement
of the financial position of a concern at a given
date.
The financial position of a concern is revealed by
its assets on a given date and its liabilities on that
date. Excess of assets over liabilities represents
Capital. Such excess may be taken as an indicator
of the financial soundness of a concern.