Steps of preparing Final Accounts is -a- Trading Account nbsp-b- Profit and Loss Account-c- Balance SheetTrueFalse

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Byju's Answer

Standard XII

Accountancy

Financial Statements of NPO

Steps of prep...

Question

Steps of preparing Final Accounts is -
(a) Trading Account
(b) Profit and Loss Account
(c) Balance Sheet

True

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False

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Solution

The correct option is A True
Final accounting is the last step of accountancy in any business. It involves three series of steps or three accounts, Trading account, Profit and Loss account and then Balance sheet. This order must remain same under any situation.
The order of preparing accounts must be same because first gross profit/loss has to be calculated and then only net profit/loss will be calculated and after that all assest and liablilities will be presented. Hence, the statement is true.

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Similar questions

Trading & Profit & loss account and balance sheet is prepared from:

State whether the following statement are true or false.

1. Final Accounts are prepared on the basis of Trial Balance.
2. Trading Account is a part of Profit & Loss Account.
3. Profit Loss Account is prepared to find out Gross Profit or Gross Loss.
4. Gross Profit or Gross Loss is transferred to Balance Sheet.
5. An amount of net profit is added to the capital.
6. All indirect expenses are debited to trading account.
7. Balance Sheet is a statement and not an account.
8. Capital account is a personal account.
9. Amount of prepaid expenses appears on assets side.
10. Bank Overdraft is a liability of business concern.

A Statement of Affairs is similar to the :

(a) Balance sheet
(b) Trial balance
(c) Trading Account
(d) Profit & Loss Account

From the following trial balance of Mr. A. Lal, prepare trading, profit and loss account and balance sheet as on March 31, 2017.

Account Title	Debit Amount Rs	Credit Amount Rs
Stock as on April 01, 2016	16,000
Purchases and Sales	67,600	1,12,000
Returns inwards and outwards	4,600	3,200
Carriage inwards	1,400
General expenses	2,400
Bad debts	600
Discount received		1,400
Bank over draft		10,000
Interest on bank overdraft	600
Commission received		1,800
Insurance and taxes	4,000
Scooter expenses	200
Salaries	8,800
Cash in hand	4,000
Scooter	8,000
Furniture	5,200
Building	65,000
Debtors and Creditors	6,000	16,000
Capital		50,000

Closing stock Rs 15,000.

Q. The final accounts of a manufacturing company generally include the following statements.
i) Balance Sheet
ii) Manufacturing Account
iii) Profit and Loss Account
iv) Trading Account
v) Profit and Loss Appropriation Account.
The correct sequence in which the statements are prepared is?

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Steps of preparing Final Accounts is -(a) Trading Account (b) Profit and Loss Account(c) Balance Sheet

Steps of preparing Final Accounts is -
(a) Trading Account
(b) Profit and Loss Account
(c) Balance Sheet