Final Accounts
Final Accounts gives an idea about the profitability and financial position of a business to its management,owners and other interested parties.Final accounts are prepared at the end of a fiscal year. It is a combination of following statements- Trading Account Profit and Loss Account Balance Sheet 1. Trading Account It is prepared to find out the gross profit of the business for the particular accounting period.It is calculated by comparing the net sale with the cost of goods sold (COGS). Gross Profit / Loss =Net Sale - COGS Net Sale= Total sale ( cash sale + credit sale) - Sales returned/ Returned inward Cost of Goods Sold= Opening Stock + Net Purchase + Direct expenses - Closing Stock 2. Profit and Loss Account Profit and loss statement or Income statement is prepared to find out the net profit/ loss of the business for the particular accounting period. It is calculated by comparing the Gross Profit / Loss with indirect income and expenses. Net Profit / Los