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PREPARATION OF FINAL ACCOUNT

Final Account consists of three parts:

(i) Trading Account

(ii) Profit and loss Ale

(iii) Balance sheet

It should be prepared in the following way:

(i) Journalisation of transactions

(ii) Postings of journal entry to ledger Ale

(iii) Balancing of ledger (Find the debit or credit.)

(iv)Prepare Trial Balance with the help of balances which are found out from various ledgers.

(v) From the Trial Balance, now, we have to prepare the Final Account

(vi)At the time of preparing Final Account, all the adjustments are taken care of at the appropriate places.