Final accounts

Final accounts gives an idea about the profitabilitty and financial position of a business to its management, owners, and other interested parties. All business transactions are first recorded in a journal. They are then transferred to a ledger and balanced. These final tallies are prepared for a specific period. The preparation of a final accounting is the last stage of the accounting cycle. It determines the financial position of the business. Under this it is compulsory to make trading account, the profit and loss account and balance sheet. Final accounts gives an idea about the profitabilitty and financial position of a business to its management, owners, and other interested parties. All business transactions are first recorded in a journal. They are then transferred to a ledger and balanced. These final tallies are prepared for a specific period. The preparation of a final accounting is the last stage of the accounting cycle. It determines the financial position of the business. Under this it is compulsory to make trading account, the profit and loss account and balance sheet. The term 'final accounts' includes the trading account, the profit and loss account, and the balance sheet.