Accounts are the subject to be studied in depth as we know it brings some difficult topics which students are not able to deal with, and they ultimately need help of preparation of final accounts homework answers to solve their assignments. Final account gives an estimate about the lucrative of the organization.
First, all the transaction in taking place in a business are registered in a journal diary then they are to shift to account book and the process of balancing starts. In an accounting cycle there are many steps followed and among all that final accounting is the last step taken.
Accounting is a process in which data gathered is established after calculation such as gain or loss incurred. The main function of final accounts is to provide the information about the financial situation of the business organization to its management, proprietor, and parties interested in involved the company.
Final accounts comprise:
- Trading account and profit and loss account
- Balance sheet
In an income statement, all the accounts involving the profit and loss of an organization is shown briefly.Basically increase in profit or decrease in profit or loss both is shown in different accounts and the combination of all these is called income statement.
Most importantly it has been divided into two parts:
- a) Trading account
- b) Profit and loss accounts
1) Trading account–
This is the prior step taken in the accounting process. It presents gross gain and loss in the account sheet and registers only the net sale and direct price of sold out goods and services. A glimpse through preparation of final accounts homework answers will give you the details.
According to system if total amount calculated in credit account side is more than debit account side than it is the condition of gross profit whereas if debit side is more than credit side it leads to gross loss.
Accounting is a process of maintaining all financial report and records them in the journal. Dealing with issues of accounts is backbreaking for college students, and it is sometimes tough to search for good educated tutors with facilities they need but here is preparation of final accounts homework answers help online to sort student problem. There are online experts who help to figure out students difficulties.
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Preparation final accounts homework answers illustration:
(Ended on 31st december,2015)
Debit account Credit account
Particulars amount Particulars amount
To opening stock 20,000 sales account 1,70,000
Purchases 82,000 minus- taxes 20,000
Wages 3,000 minus (returns) 2,000
Cartage inward 2,000 Total 1,48,000
Freight 1,000 By closing stock 22,000
Octroi duty 2,000
Profit and loss a/c 60,000
2) Profit and loss accounts–
This is basically organized during accounting period to determine whether the organization is earning profit or receiving loss. All the accounts consisting name is entered into profit and loss account as we know all the expenses and losses are added to debit side, and all the incomes and gains are included to credit side.
Then to determine the profit or loss incurred the debit and credit accounts are compared. In this account, all the profit and loss are gathered in order to find out the excess of gains and loss. The amount paid or earned amount which is not included in trading account are credited or debited here in profit and loss accounts.
* To ensure net profit
* To have command over expenses
* Comparing with previous year profit
- a) If the credit accounts surpass the debit side, then it shows the gain acquired through the process
- b) If the debit accounts surpass the credit account, then itis the situation of loss within the accounting period
Preparation of final accounts homework answers illustration:
Profit and loss accounts
(Ended on 31st January 2016)
Debit account credit account
Particulars Amount Particulars Amount
To purchases 10,000
Net profit 3,000 by sales 14,200
(Move to capital A/c
In balance sheet)
3) Balance sheet:
Here comes the balance sheet, preparing a balance sheet is a hectic task which students avoid to do, but it is the most significant part of accounting as it tells the financial status of the organization. It gives head to toe information about a business such as liability or financial obligation of the company and about the asset a company has. Under this, all real and personal accounts are involved.
Preparing of final account homework answer illustration:
( On 31st December2016)
Liabilities Amount Assets amount
Capital 25,000 Cash 18,000
Add: Profit 1,000 Bank 6,000
Subtract: withdraw 1,000 Fridge 4,000
Joseph Rihaan 1,000
Total 25,000 Total 29,000
25,000 + 4,000= 29,000
As shown in the above illustration total assets and liability has to be equal, or otherwise, they are balanced by adding or subtracting and if in case both sides do not match then there must be any fault in journal. The errors are first found out, traced and then balanced.