This document discusses the preparation of final accounts, which involves the trading account, profit and loss account, and balance sheet. The trading account is used to calculate gross profit and loss. The profit and loss account calculates net profit or loss. The balance sheet shows sources of funds and their utilization. The document also discusses the treatment of various adjustments like outstanding expenses, prepaid expenses, depreciation, and their impact on the final accounts. Preparing final accounts is essential for organizations to understand their actual performance.
Creating Sales and Purchase vouchers in Tally is extremely easy and simple. They are often referred to as purchase entry in Tally and sales entry in Tally. Learn how to do it in this video by Attitude Academy Yamuna vihar, Delhi.
Management Accounting - Meaning, Definition, Characteristics, Scope, Objectiv...RajaKrishnan M
Meaning Definition Characteristics Scope Objectives and Function Financial accounting and Management accounting - Management accounting and Cost accounting - Cost accounting and Management accounting and Financial accounting - Tools and Technics- Advantages and limitations
MEANING OF COMPANY
Company is a voluntary association of persons formed for the purpose of doing business having a distinct name and limited liability. It is a juristic person having a separate legal entity distinct from the members who constitute it, capable of rights and duties of its own and endowed with the potential of perpetual succession. The Companies Act, 1956, states that 'company' includes company formed and registered under the Act or an existing company i.e. a company formed or registered under any of the previous company laws.
This power point presentation related to process costing. which is useful to students who studying B.com, BBA,M.COM MBA etc.
It involves short notes on definition of process costing,its features,applications,difference between process costing and job costing, advantages and disadvantageous of process costing, procedure of process costing,format of process account, process losses and abnormal gain.
Creating Sales and Purchase vouchers in Tally is extremely easy and simple. They are often referred to as purchase entry in Tally and sales entry in Tally. Learn how to do it in this video by Attitude Academy Yamuna vihar, Delhi.
Management Accounting - Meaning, Definition, Characteristics, Scope, Objectiv...RajaKrishnan M
Meaning Definition Characteristics Scope Objectives and Function Financial accounting and Management accounting - Management accounting and Cost accounting - Cost accounting and Management accounting and Financial accounting - Tools and Technics- Advantages and limitations
MEANING OF COMPANY
Company is a voluntary association of persons formed for the purpose of doing business having a distinct name and limited liability. It is a juristic person having a separate legal entity distinct from the members who constitute it, capable of rights and duties of its own and endowed with the potential of perpetual succession. The Companies Act, 1956, states that 'company' includes company formed and registered under the Act or an existing company i.e. a company formed or registered under any of the previous company laws.
This power point presentation related to process costing. which is useful to students who studying B.com, BBA,M.COM MBA etc.
It involves short notes on definition of process costing,its features,applications,difference between process costing and job costing, advantages and disadvantageous of process costing, procedure of process costing,format of process account, process losses and abnormal gain.
After the preparation of Trial Balance, in the final stage of summarizing, Final accounts of the business are prepared which includes Trading, Profit & Loss A/c & Balance Sheet. Preparation of these statements & the various adjustments therein have been discussed here.
Definition and purpose of account adjustment
Common types of account adjustments (e.g., Accrued Revenue ,Accrued Expenses ,Deferred Revenues ,Deferred Expenses)
time issue
Types of adjusting entries
"Unlocking the Secrets of Profit and Loss: A Visual Presentation"MohammedRass
Are you looking to understand the dynamics of profit and loss in business? This comprehensive PowerPoint presentation offers a clear breakdown of key principles, real-world examples, and actionable strategies to boost your bottom line. Unlock the secrets of financial success and take your business to new heights.
This comprehensive program covers essential aspects of performance marketing, growth strategies, and tactics, such as search engine optimization (SEO), pay-per-click (PPC) advertising, content marketing, social media marketing, and more
2. Preparation of Final Accounts involve:
Trading Account ( The objective is to ascertain the gross
profit and gross loss of an organization during an accounting
period.)
Profit and Loss account ( To ascertain net profit or net loss
during an accounting period)
Balance Sheet ( It shows the financial position of the of a
business by detailing the sources of funds and utilization of
funds.)
3. Trading Account
Particulars Amount Particulars Amount
To Opening Stock By sales
To Purchases
Less Purchase Return
By
Closing
Stock
To Carriage Inwards
To wages
Gas, water and Fuel
Lighting and Heating
Factory Expenses
To Gross profit (IF)
4. Profit and loss Account
Particulars Rs Particulars Rs.
Management expenses (Admin.
Salaries, Office rent and Taxes,
Telephone, stationary, Insurance, audit
fees, Legal Charges, Electricity)
By Gross profit b/d
Maintenance Expenses ( Repairs and
Depreciation)
Other Income( dis.,
Comm. Recd.)
Selling and Distribution Expenses
( Advertisement, Carriage Outward,
Bad Debts, Commission)
Non Trading Income
( Interest, rent,
dividend)
Financial expenses ( Interest ,
Discount on bills)
Abnormal gains
( Profit on investment
and sale of an asset)
Abnormal Losses( Loss by fire, sale
of an asset)
5. Balance Sheet
Rs Rs Rs
Fixed Assets:
Land, Building, Plant and Machinery, Furniture
Current Assets:
Stock, Debtors, Bills Receivable, Cash at Bank,
Cash and Hand
Current Liabilities:
Creditors, Bills Payable, Outstanding Expenses
Working Capital
Net Asset Employed Financed By:
Capital
Add: Net Profit
--
--
--
--
--
--
--
--
6. Treatment of Adjustments
Outstanding Expenses : ( due for accounting period but
not paid) Add this amount in the particular expense either
in trading or P&L A/c and show as Current Liabilities in
Balance Sheet.
Prepaid Expenses: (Expenses paid in advance) Deduct this
amount in the particular expense either in trading or P&L
A/c and show as Current Assets in Balance Sheet.
7. Outstanding Income: (Income due in accounting
period but still not received) Add this amount in the
particular income in P&L A/c and show as Current
Assets in Balance Sheet.
Income Received in advance: (Income received in
advance by business before it being earned by the
business.) Deduct this amount in the particular income
in P&L A/c and show as Current Liabilities in Balance
Sheet.
Depreciation: Show this amount in the P&L A/c and
deduct form that particular fixed asset in the Balance
Sheet.
Interest on Capital: Show this amount as Financial
expense P&L A/c and added in capital in Balance Sheet.
8. Bad Debts and Provision for bad debts and discount on
debtors
First, all the amounts of bad debts will be subtracted from
total amounts of debtors
Provision for bad debts will be subtracted from the
remaining amount of debtors
At last, discount on debtors will be subtracted from the last
remaining amount of debtors
Debit side of profit and loss account
9. Conclusion
Final accounting is an essential practice for
every enterprise to know the actual
performance of the organization. All mature
organization should necessary prepare final
accounts of the organization for the
effectiveness of business organization.