FINAL ACCOUNT WITH EXAMPLE

A final account is the profit and loss account and balance sheet which is prepared from trial balance expressed from the ledger account.

The balance sheet reflect the position of the company as on the date once profit and loss account gives the result of the business concern that is profit or loss (income or loss).

In the business, there are 2 faces of balance sheet assets and liabilities. Liability side shows company's capital, reserves, loans and creditors and asset side shows the loans and advances and current and fixed assets.

Final Accounts Examples
 
1. Following is the Trial Balance of Sanjai Ltd., Hospet as on 31.12.2009.

Trial Balance as on 31.12.2009



Adjustments:
1. Transfer Rs. 10000 to Reserve Fund.
2. Provide depreciation on building at 5%.
3. Stock on 31.12.2009 was valued at Rs. 12000.
4. Dividend at 15% on share capital is to the provided.
5. Depreciation on Plant and Machinery at 10%.

Prepare Trading, profit and Loss account, Profit and Loss Appropriation, Account and Balance Sheet in the prescribed form.

Solution: