Final Accounts Adjustments Quiz

Final Accounts: Adjustments

• Direct Expenses are adjusted in Trading Account.
• Balance Sheet is prepared to present the financial status of a company.
• Bills Payable are adjusted in the Balance Sheet.
• The Trading Account is used to calculate the Gross Profit or Loss of a business.
• The Profit & Loss Account is used to calculate the Net Profit or Loss of a business.
• Trading Account is used to show the cost of goods sold and the gross profit or loss of a business.
• Profit & Loss account shows all indirect expenses and incomes and is prepared after the Trading Account.
• Trading Account shows the cost of goods sold, which is the main element in the final accounts.
• Profit & Loss Account shows the net profit or loss after considering all other expenses and incomes, which is important for investors and creditors.
• Final Accounts are a set of financial statements prepared at the end of an accounting period to show the financial position of a business.
• Balance Sheet is included in Final Accounts because it shows the financial position of a business at a specific point in time, which is essential for investors and creditors.
• A Balance Sheet is a statement that shows the assets, liabilities, and equity of a company at a particular point in time.
• The Balance Sheet is prepared to show the financial position of a company at a particular point in time and is prepared after the Trading and Profit & Loss Accounts are prepared.
• Balance Sheet displays the assets, liabilities, and equity of a company, giving insights into its financial health and overall business standing.