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Finalaccount 180112112514
Finalaccount 180112112514
Finalaccount 180112112514
with adjustment
generlly three accounts prepared in final account
1. Trading Account
2. Profit & Loss Account
3. Balance Sheet
Trading Account .The account which is prepared to
determine the gross profit or gross loss of a business concern is
called trading account
Trading Account
as on 31 december 2013
Particular Amount Particular Amount
Direct Expenses Direct revenue
To opening stock By Sales
To purchases Less; Sales Return
Expenses those are related just By closing Stock
purchases
Transport in
carraige
Wages
Gross Profit C/D (p&l a/c) Gross loss C/D (p&l a/c)
Total Total
Features of Trading account
• It is the first stage of final accounts of a trading concern.
• Direct expenses are recorded on its debit side and direct revenue on its credit side.
• All items of direct expenses and direct revenue concerning current year are taken into account
but no item relating to past or next year is considered in it.
• If its credit side exceeds it represents gross profit and if debit side exceeds it shows gross loss.
Direct and indirect Expenses
• Direct Expenses:
• Expenses connected with purchases of goods are known as direct expenses. For
example, freight, insurance, of goods in transit, carriage, wages, custom duty,
import duty, octroi duty etc. Without incurring these expenses, it is not possible to
bring the goods from the purchase point to the godown of the business. such
expenses are collectively known as direct expenses.
• Indirect Expenses:
• All expenses other than direct expenses are assumed as indirect expenses. Such
expenses have no relationship with purchase of goods. Examples of indirect
expenses include rent of building, salaries to employees, legal charges, insurance
of building, depreciation, printing charges etc. So
Examples of direct and indirect Expenses
Profit and loss Account. The account through which annual net
profit or loss of a business is ascertained, is called profit and loss account.
Profit & loss A/c
as on 31 december 2013
Particular Amount Particular Amount
Indirect Expenses indirect Revenues
By Gross loss B/D T A/c By Gross Profit B/D T A/c
Rent of building Other Revenue of business
Salaries of emplyee
Utility bill
electriciy bill
Net profit C/D balance sheet Net loss C/D balance sheet
Total Total
Features of Profit and Loss Account:
• This account is prepared on the last day of an account year in order to
determine the net result of the business.
• It is second stage of the final accounts.
• Only indirect expenses and indirect revenues are shown in this account.
• It starts with the closing balance of the trading account i.e. gross profit
or gross loss.
• All items of revenue concerning current year - whether received in cash
or not - and all items of expenses - whether paid in cash or not - are
considered in this account. But no item relating to past or next year is
included in it.
Balance sheet. "It is a statement which discloses total assets, total
liabilities and total capital (owner's equity) of a concern on a particular date"
Balance Sheet
Liabilities & Capital Amount Assets Amount
Capital non current assets
Add: Net profit Cash , bank , inventory , Accrued
Expenses , etc
less: Net loss non current assets
less: Drawings building, furniture, fixture , saving bank
a/c land , plant , machinary
Current liabilities