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Importance of the Topic Meaning of Final Accounts/Financial Statements-
It is very important to understand this topic as it is the base of accounting. So, all the accounts and finance students must know about this concept with full clarity. Our team promises for complete Meaning of Final Accounts/Financial Statements Assignment Help at anytime as per your choice. Let us see the importance this topic holds-
- Final accounts/ financial statements are an indicator of the financial position and the profitability of any enterprise which are generally prepared at the end of accounting period.
- First of all journal entries are passed, then ledger accounts are prepared and from the balances of ledger accounts trial balance is prepared. With the help of trial balance final accounts for the accounting period are made.
- Final accounts/ financial statements include trading account, profit and loss account and balance sheet.
- Trading account basically deals with the purchase and sale of goods and it discloses gross profit or gross loss, profit and loss account helps in ascertaining net profit or net loss during the financial year and balance sheet shows the financial position on a particular date comprising the assets and liabilities.
- Final accounts are very important from the point of view of management, the owners of business, investors, creditors, shareholders and various other parties, as only by looking at the financial statements one can come to know how the organization is performing financially.
- It gives a brief summary of all the financial transactions of a business by which the relevant information required for the decision making process can be derived at.
- By seeing the results of financial statements management decides what future strategy they need to adopt and if any diversion is required in the current plan.
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