The preparation of Company Final Accounts include the preparation of a set accounts at the end of accounting year/period. The Company Final Accounts consists of:

1. Trading Account

2. Profit and Loss Account

3. Profit and Loss Appropriation Account

4. Balance Sheet

Though the company’s law makes the preparation of only the Profit and Loss Account and Balance Sheet obligatory on the company, but from accounting point of view, it is desirable that Trading Account should be made. So that the Gross Profit and Net Profit may be ascertained. In addition, the company should make out a Profit and Loss Appropriation Account to show how the available profit has been distributed.

1. Trading Account

The aim of the Trading Account is to find out Gross Profit or Gross Loss of company. Gross Profit/Loss is the difference between net sales and cost of goods sold. This account contains opening and closing balance of inventory, net purchases and net sales and all expenses incurred on purchase or purchase of inventory.

 

Trading Account Format

 

Name of Company

Trading Account
For the Period / Year ended ……

trading account format_company final accounts

 

Practice Final Accounts MCQs

2. Profit and Loss Account 

Profit and Loss Account is important part of company final account. Gross profit or gross loss calculated in trading account is taken to the second account called Profit and Loss Account. All remaining expenses or losses are shown on debit side and other income or gains are reported on credit site of this account.

 

Profit and Loss Account Format

Name of Company

Profit and Loss Account
For the Period / Year ended ……

profit and loss account format_company final accounts

3. Profit and Loss Appropriation Account

Profit and Loss Appropriation Account is component of company final accounts. This account is a subdivision of the profit and loss account, which shows the profits available for distribution among the shareholders and the division proposed in different heads. The net profit/loss shown by the profit and loss account is transferred to the credit of this account. Any balance of profit left from the previous year will also appear as the first item on the credit side of the account. On the debit site of this account will appear all such items as represent allocations or appropriations of net profit, such as dividend declared, amount set aside for debenture redemption fund, reserve fund etc. Provisions made in respect of income tax payable, as also any percentage of net profits payable to the general manger should be charged to this account. This account must always show a credit balance representing profit not distributed and will appear on the liabilities side of the balance sheet.

 

Profit and Loss Appropriation Account Format

 

Name of Company

Profit and Loss Appropriation Account
For the Period / Year ended ……

profit and loss appropriation account format_company final accounts

Balance Sheet

Every company is required to prepare a Balance Sheet at the end of each trading period. Balance sheet shall give a true and fair view of the state of affairs of the company at the end of its financial year and should comply with requirements of IAS, IFRS and prevailing laws and regulation of particular country. This statement contains assets, liabilities and share capital accounting with sub-types.

 

Balance Sheet Format

 

Name of Company

Balance Sheet
As on ……

balance sheet format 1_company final accountsbalance sheet format 2_company final accounts

 

 

 

 

Name of Company

Trading Account
For the Period / Year ended ……

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