Presentation By:- Presentation To:-
Prince Babel Mr. Gaurav Garg
BBA (1-SEM)
ACKNOWLEDGEMENT
I would like to express my special thanks of
gratitude to my teacher Mr. Gaurav Garg, who gave
me the golden opportunity to do this wonderful
project of Accountancy. Who also helped me in
giving suggestion for changes in my project. I
came to know about so many new things I am
really thankful to them.
FINAL ACCOUNTS
DEFINITION:-
• Final accounts are various Accounts and Statement
That Provide Information Related to Progress Of
Company.
• It Derives Form the Trail Balance.
• Trading a/c, Profit & Loss a/c and Balance Sheet of
the company at the End of Financial Year are
Collectively Known as Final Accounts.
Components of FINAL ACCOUNT
1. TRADING ACCOUNT
2. PROFIT & LOSS ACCOUNT
3. BALANCE SHEET
TRADING ACCOUNT
• This is the first Account Prepared to Ascertain Gross Profit
Or Gross Loss Incurred During An Accounting Period.
• This account records expenses which are related to
manufacturing, factory, production expenses.
• The Balance of Trading A/C is Transferred to Profit & Loss
A/C.
Features of TRADING ACCOUNT
• TRADING ACCOUNT Only Records Net Sales
And Direct Cost Of Goods Sold.
• Gross Profit and Gross Loss is Transferred to
Profit & Loss A/C.
TRADING ACCOUNT INCLUDES
DEBIT SIDE CREDIT SIDE
• Opening Stock • Sales
• Purchase -(Sales Return)
-( Purchase Return) • Closing Stock
• Direct Expenses • Gross Loss
( Carriage Inward, Freight
Inward, Factory Expenses,
wages etc.
• Gross Profit
PROFIT & LOSS ACCOUNT
• Profit & Loss Account is prepared after
Preparing the Trading Account
• It is Prepared to Determine NP Earned
or Net Loss Incurred by the Business
During an Accounting Period.
• Profit & Loss Account Shows All
Income & Indirect Expenses Related to
Business
Features of PROFIT & LOSS A/C
• It is Related to a Particular Accounting Period & it is
Prepared at the end of the Period.
• It Shows the Financial Performance Of an Enterprise
During an Accounting Period.
• It is Credited With GP and Income From Other
Sources And Debited with Indirect Expenses and
Losses.
• Balance of This A/C is NP or NL.
Needs Of PROFIT & LOSS A/C
• To Determine NP & NL.
• Comparison With the previous
year Profit.
• Finding Details Of Indirect
Expenses.
• Help in Preparing Balance sheet.
BALANCE SHEET
• The Balance sheet is Prepared After
Preparing Trading Account and P&L
account.
• Balance sheet is a statement which set out
the Assets & Liability of a firm or an
Institution as at a certain Date.
• Balance Sheet is the Screen Picture of the
Financial Position of a Going Business at a
certain Movement.
Needs of BALANCE SHEET
• To know the Financial Position of
the firm at the Particular Point of
time.
• To know Amount of Liability &
Assets.
• It helps in determining weather
form is Solvent or not.
Some Examples of
Final Accounts
Q. Dr. TRADING A/C Cr.
Particular Amount Particular Amount
To Balance B/D 34600 By Sales 154500 152500
To Purchase 55750 54500 (-) S/R. 2000
(-) P/R. 1250 By Balance C/D 32500
To Gross Profit 95900
185000 185000
PROFIT & LOSS A/C
• Stock in Hand on 31st March, 2018 was valued
Particular Amount Particular Amount
at Rs 32,500.
To Bed/Debt 1250 By Gross Profit 95900
From the above, prepare Trading and Profit and To Advertisement 4500 By Commission 1750
Loss Account for the year ended 31st March, To Interest 1180
2018 and Balance Sheet as at that date. To tax Insurance 12500
To General Charges 7820
To salaries 33000
Answer:- To Net Profit 37400
97650 97650
BALANCE SHEET
Liability Amount Assets Amount
Current Liab Fixed assets:
Bills Payable. 2000 Fur. & Fitting. 6400
Bank O/D. 28500 Motor & vehicle 62500
Creditors. 25000 Building. 75900
Long term liab Current Assets:
& Capital: Sundry Debtors. 38000
Capital 128000 Cash in Hand. 6500
Add: NP 37400 166300 Closing Stock. 32500
221800 221800
Q. PROFIT&LOSS A/C
Particulars Particulars Amount
Amount
To Gross Loss 155000 By commission10000
To bed/debts 10000 By Net Loss 220000
To rent 45000
To sundry Expenses20000
230000 230000
Closing Stock was of Rs 70,000 but its net Balance Sheet
realizable value was estimated at Rs 60,000. Liabilities Amount Assets Amount
Answer:- Current Liab: Current assets:
TRADING A/C Creditors. 140000 Bank 150000
Particular Amount Particular Amount Long term liab Stock 60000
& Capital: Debtors 270000
To Opening Stock A/c 200000 By Sales 1450000 Capital. 1000000 Fixed assets:
To Purchases A/c 950000 By Closing 60000 Less: net loss 220000 Building 150000
To Wages A/c 500000 Stock 155000 Less: drawings 90000 690000Machinery 200000
To Carriage A/c 15000 By Gross loss
1665000 1665000 830000 830000
Q. P&L A/C
Particular Amount Particular Amount
To Salary 60000 By Gross Profit 410000
To General Exp. 20000
To Rent 50000
Carriage Outward 20000
To Advertising 20000
To Net Profit 240000
The Closing Stock was Valued at RS. 200000
410000 410000
Answer:-
Trading A/C
Balance Sheet
Particular Amount Particular Amount
Liability Amount Assets Amount
To opening Stock 100000 By Sales 820000 810000
10000 200000 Current Liab. Current Assets
To Purchase400000 (-)S/R
Creditors 50000 Cash 40000
(-)P/R 5000 395000 By closing Stock
Long Term Liab. & Debtors 300000
To Wages 100000
Capital Closing Stock 200000
To Carriage 5000
inward 410000 Capital 360000 Fixed Assets
(+) Net Profit 240000 Machinery 70000
To Gross Profit
1010000 1010000 (-) Drawings 40000 560000
610000 610000
