Final accounts

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Final accounts gives an idea about the

The term "final accounts" includes the

Sections 209 to 220 of the Indian Companies Act, 2013 deal with legal provisions relating to preparation and presentation of final accounts by companies. Section 210 deals with the preparation of final accounts by companies, while section 211 deals with the form and the contents of the balance sheet and the profit and loss account.

A trading account records the factory or direct expense/ incomes. It shows the results of the

According to J. R. Batlibboi,

"The Trading Account shows the result of buying and selling goods. In preparing this account, the general establishment charges are ignored and only the transactions in goods are included."

This account is prepared to ascertain the net profit/loss and expenses of a business during an accounting year.It records the indirect expenses of a business firm, like rent, salaries, and advertising expenses. Profit and loss a/c includes expenses and losses as well as income and gains, which have occurred in business other than the production of goods and services.

The balance statement demonstrates the financial position of a business on a specific date, usually at the end of a year. The financial position of a business is found by tabulating its assets and liabilities on a particular date. The excess of assets over liabilities represents the capital sunk into the business and reflects the financial soundness of a company.

Now it is known as the statement of financial position of the company.

Trade expenses, simply put, are the everyday

• Labor Costs: Wages paid to
  employees
  who are engaged directly with the manufacturing or production process.
• Raw Materials: The cost of materials that go directly into the production of goods
• Manufacturing Supplies: Costs of supplies and consumables used in the production process.^[2]

Indirect trade expenses are said to be those that are not directly connected to the line of production but are nonetheless involved in the running of the business. These include:

• Salaries: Remunerations paid to the administrative and support staff.
• Utility Bills: Consumptions of electricity, water, and other utilities used in running the business.
• Rent: Expenses incurred on renting business premises.
• Advertising and Marketing: These are expenses incurred in popularizing the products or services.
• Transportation: This involves costs connected with
  shipment and logistics.^[3]