A final account is the last stage of accounting process in any organization. It maintains the records of all transactions in a particular cycle and prepares the worksheet accordingly. It is primarily prepared to help the management, the investors, the stakeholders, and the owners about the operability and the financial stability of an organization at the end of the cycle. This allows them to take necessary actions based on the report. A final account comprises of the following:
A final account is the last stage which depicts the relevancy of the organization in the market. Based on the final account the investors decide to further invest or back out. It is a crucial part of accounting process as the fate of an organization lies in it. Despite being such a vital part of the accounting process for an organization, it comes with its own flaws. A few of the limitations of the final account is mentioned below.
With the above points it is apparent that no matter how significant a final account is, it would always include these flaws. It may capture the financial stability monetarily; however, the human aspect of performance would always be absent. Moreover, the effects of inflation are also unnoticed, even though the organizationâ€™s flourishing. That being said, it would be extremely difficult to standardize such a vital process of accounting process.
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