Final Accounts

Final accounts refer to the set of books that are prepared after the bookkeeping stage. Income statement, balance sheet, cash flow statement are some examples of final accounts.

  • How to Prepare Profit and Loss Account

    How to Prepare Profit and Loss Account

    A profit and loss account is also known as the income statement or statement of revenues and expenses is prepared to ascertain the profit earned or losses suffered by the business entity. We have already discussed the theoretical concepts about profit and loss account. Now here we shall discuss only practical aspects only. P&L Account starts with gross profit on the credit side. In the case of gross loss, it will start from the debit side. All those expenses and losses, which have not been entered in the Trading Account, will be entered on the debit side of Profit and Loss Account. Incomes and gains, other than sales, will be entered on the credit side. The expenses which are of personal in nature will not be charged to Profit and Loss A/c. Only those revenue expenses and losses which are related to the business for the current year are debited to…

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  • example of financial analysis

    Financial Analysis of Sainsbury’s

    Introduction Sainsbury is incorporated in the United Kingdom and is listed on the London Stock exchange. It is a public limited Company having financial year 52 weeks to 16 March 2013.  The consolidated financial statements are prepared at the year-end to represent the group accounts with the subsidiary figures. The company’s principal activities are retail of grocery and non-food items. The operations are divided into three segments: Retailing (with the help of supermarkets, online stores and Convenience stores), Financial Services (Sainsbury’s Bank joint venture) and the property or estate investments (represented by the British land company private limited jointly venture with Land Securities Joint venture). The major earning of the business is based on Retailing operations. The presentation currency of the financial statements is sterling. These are prepared on the basis of going concern assumption and historical cost convention except for selected heads which are required to be recognized on…

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  • incomplete records system

    Incomplete records system is unscientific

    Incomplete records system is unscientific, incomplete, inaccurate and unsystematic. ExplainIncomplete records system, also known as a single entry system is not a standard practice like double-entry system based on dual aspect concept. The double-entry system is based on scientific dual aspect concept that makes it possible to scientifically locate any error arising due to emission, omission or clerical mistake. Two sides of the trial balance will not tally if there is an error in the double-entry system.  However, there is no such advantage in using the single-entry system or incomplete record system. These records are maintained by accounting novice people or small traders who are not officially required to maintain books of account. Considering the above differences with the double-entry system, we can observe the following limitations of incomplete record system: It is an incomplete and unscientific system.Automatic check and reconciliation of accounts are not possible.Correct excess or diminution of…

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