Master Note of Accounting and Finance

Introduction  to Final Accounts Final Account gives an idea about profitability and financial position of the company to its stakeholders include management, owners, employees, investors, shareholders, etc. Final Account is one of the steps of accounting cycle. It is the combination of Trading and Profit and Loss account which is one of the part of Financial Statement. Financial statement includes major four account i.e. Income Statement, Balance Sheet, Cash Flow Statement and Statement of Retained Earnings. Profit and Loss account sometimes also called Income statement. Income Statement could be either in Single step format or Multi-step format.  Trading account basically deals with Direct incomes and Direct expenses accounts where as Profit and Loss account deals with Indirect Incomes and Indirect Accounts.  Note: Manufacturing account is prepared to determine the manufacturing cost of finished goods. The cost of finished goods then transferred from this account to Trading Account t

Meaning of Worksheet Work sheet is a scratch pad tool for accountants outside the accounting system. It is not a formal step in accounting cycle ; rather it is the rough work done for some purpose, hence the phrase scratch pad. The accountants work out the details of the end-of-period adjustments and get a preview of the financial statements using the work sheet.  Work sheet is a schedule of data showing the relationship among (1) adjusting entries (2)  adjusted trial balance , and (3) financial statements. Unadjusted trial balance is a temporary trial balance prepared before considering year-end adjustments.  Adjusting journal entries is process of adjusting year-end adjustment with the unadjusted trial balance. Adjusted trial balance is a permanent trial balance that is prepared after adjusting the year-end adjustments.   Work sheet is also known as 'extended trial balance' (ETB). This terminology is quite popular in the British accounting literature. Importants of Work Shee