Final Account Statements
Final Statement of Accounts or Final Accounts is the final result of all financial activities in a nutshell. Final Accounts is prepared at the end of a financial year to ascertain the profit/loss of the organisation and to exhibit the condition of the organisation in monetary terms. However, Final Accounts is prepared in non profit seeking organisations too, where question of surplus/deficit instead of profit/loss arise.
Constituents of Final Accounts
Profit Seeking Concerns
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Non - Profit Seeking Concerns
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Manufacturing Account
This is prepared in manufacturing concerns only. This statement of accounts does not show profit or loss but it is used to show the cost of raw materials, labor and production overheads.
Sample Manufacturing Account
Trading Accounts
Trading accounts calculates trading profit or Gross Profit. This account shows how the gross profit gets generated through the prime trading activities of a concern. The expenses that are directly related to the trading are included in this account.
Sample Trading Account (For Non Manufacturing Unit)
Profit & Loss Account
Profit & Loss Account generates the Net Profit of a concern. The expenses and other incomes that are indirectly related to the trading are included in this account. This shows how the profit was earned.
Sample Profit & Loss Account
Profit & Loss Appropriation Account
Profit & Loss Appropriation Account is used to show how a firms profit has been utilized, i.e. used in Dividend Payments, increase reserve etc. This is more interested to show the fate of the profit than the origin of profit.
Sample Profit & Loss Appropriation Account
Income & Expenditure Account
In non-profit seeking organisations no profit & loss account is created since the activity if the organisation is not governed by profit motive. In these organisation Income & Expenditure Account is prepared instead of the Profit & Loss Account. Instead of profit the income over expenditure is called a Surplus and Expenditure over Income is called a Deficit. It reflects the Total Income earned by the
organization and the Total Expenditure spent during the relevant Financial Year
Sample Income & Expenditure Account
Receipt & Payment Account
Receipt & Payment Account is almost same as Cash Book, but here
consolidated figures of Cash/Bank transactions under various heads are
reflected, that took place during the year.
Sample Receipt & Payment Account
Balance Sheet
The purpose of Balance Sheet is to ascertain the financial position of an organization i.e to know what it owes and what it owns on a certain date. Hence it shows all assets and liabilities of the organization as at the end of the accounting year.