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The final balances of all the accounts that the ledger contains are transferred to the trial balance. From trial balance the expenses and income accounts are summarized and are transferred to the trading account and also to the profit and loss account. The balance sheet contains the accounts containing balances that are to be carried forward to the next year. The final stage of accounting is contained in the balance sheet. In every business, the final accounts need to be prepared every year. After all the accounts have been summarized, prepared and written and the trial balance is extracted, the trading and the profit and loss accounts are prepared. Before preparing the final accounts, it is necessary to test whether all the incomes and expenses for the year which the accounts are prepared have been duly provided for and included in the accounts. The detail description and analysis of Preparation of Final Accounts is given by Preparation of Final Accounts Assignment Help Online.
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Adjustments in Preparation of Final Accounts
The various adjustments in preparation of final accounts given in Preparation of Final Accounts Assignment Help Online are
Every concern prepares a list and a summary of unsold goods at the end of the tenure and puts value against it. We have to keep in mind that the stock is valued at cost or market price whichever less is. Generally closing stock appears as an adjustment entry in the problem and it is given at the end of the computation of the trial balance.
Sometimes the amount that is received in respect of an income during the year pertains, partially to the amount of the next year. The rent received in the advance account will be carried forward to the rent account in the next year. The fees applicable after the end of the accounting year or the subscription for copies to be supplied after the end of the year need to be credited to unearned income account to the student fees’ account.
Because of the wear, tear and efflux of time, the value of the fixed assets goes on decreasing year by year. Before the profit or loss is assumed and ascertained, this fall in the value should be treated as a loss or expense. Depreciation account is figured in the trial balance itself. Depreciation account is basically computed and calculated on the basis of the life of the assets
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