here in this ppt information is given about final ac that what is the introductin and objective and waht are the components of final ac.

1. SAS INSTITUTION OF MANAGEMENT
STUDIES
BY
RAHUL VARMA

2. What is final Account ?
Final Accounts is the ultimate stage of the accounting process where the different ledgers maintained in the
Trial Balance (Books of Accounts) of the business organization are presented in the specified way to provide the
profitability and financial position of the entity for a specified period to the stakeholders and other interested
parties, i.e., Trading Account, Statement of Profit & Loss, Balance Sheet.

3. Objective
They are prepared to calculate Gross profit & net profit earned by the organization for the relevant period
by presenting the Statements of Profit & loss
The Balance sheet is prepared to provide the company’s correct financial position as of the date.
These accounts use the bifurcation of direct expenses to obtain the gross profit & loss and bifurcation
in indirect expenses to ascertain the organization’s net profit & loss.
Through the Balance sheet, these accounts bifurcate the assets & liabilities as per the holding & usage
periods of the same.

4. Trading Account
Trading account is a statement which is prepared by a business firm.
It shows the gross profit of business activity during a specific period.
It is a part of the final accounts of the entity.
In other words, the trading account gives details of total sales, total purchases and direct expenses
relating to purchase and sales.
Trading account format for the year contains Particulars, Amount, Dr., Cr., Purchases, Sales, etc.

6. Profit & loss Account
Profit and loss (P&L) statement refers to a financial statement that summarizes the revenues, costs,
and expenses incurred during a specified period, usually a quarter or fiscal year.
These records provide information about a company’s ability or inability to generate profit by
increasing revenue, reducing costs, or both.
P&L statements are often presented on a cash or accrual basis.
P&L statements shown indirect income and expenses.
Company managers and investors use P&L statements to analyze the financial health of a company

8. Balance sheet
The balance sheet is one of the three fundamental financial statements and is key to
both Financial modelling and accounting.
The balance sheet displays the company’s total assets and how the assets are financed, either
through either debt or equity.
It can also be referred to as a statement of net worth or a statement of financial position.
The balance sheet is based on the fundamental equation: Assets = Liabilities + Equity.

10. Adjustment
Adjustment entries are the journal entries that converts an entity’s accounting record in an
accrual basis of accounting.
In accrual basis of accounting, we recognize income when we earn them and not when we
receive the cash.
Similarly, we recognize the expenses when we incur them and not when we actually pay
them.
Also, there are some incomes earned but not received and incomes which are received in
advance at the end of the accounting period.
Similarly, there may be expenses which are outstanding and also there can be prepaid
expenses. Such, accrued incomes, Incomes received in advance, outstanding and prepaid
expenses require an adjustment in the books of accounts

12. Thank you