UNIT- 7 FINAL ACCONTS
7.0 Objectives
After studying this unit you will be able to:
- Explain the purpose of preparing ha! accounts
- Prepare a trial balance from a given list of bdmces
- Prepare trading and profit and loss account
- Prepare balance sheet
- Prepare manufacturing account and cnlculate cost of goods produced
- present the find ascounts in vcrtid form.
7.1 Introduction
In Unit 6 you have learnt about the concepts which guide the preparation of final
accounts. You know that the final accounts are primarily prepared for ascertaining the
operational result and the financial position of the business. 'They consist of (k) Profit
aad hi056 Amunt, and (i) Balance Sheet. The Profit and Loss Account reveals the
profit earned or loss incurred (operational result) during the accounting year anil the
Balance Sheet indicates the financial position as at the end of the year. In this unit you
will learn about the basic.framework of final accounts including their presentation in vertical form.
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