Meaning of final accounts and what are its constituents name and explain them
Answers
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Final accounts is the trial balance that is formed at the end of the period of accounting from where we can derive the financial statements.It has two main constituents that is trading and profit and loss account which helps to tell the profit and loss incurred at the end of the financial year.The second constituent is the balnce sheet to know the position of the business of that financial year.
Final account helps one determine the financial status of the organization.
It gives an idea to the management and other officials about the profits or loss made by the company through the detailed journal which has all the business transactions done.
To determine a final account, one must create a balance sheet, profit and loss account as well as trading account.