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3.4 Final Accounts Introduction2

Final accounts are financial statements compiled at the end of an accounting period and include the profit and loss account and balance sheet. The profit and loss account shows profit or loss over time, while the balance sheet provides a snapshot of assets, liabilities, and equity at a point in time. Stakeholders like shareholders, managers, and suppliers are interested in final accounts for different business and financial reasons.

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8 views

3.4 Final Accounts Introduction2

Final accounts are financial statements compiled at the end of an accounting period and include the profit and loss account and balance sheet. The profit and loss account shows profit or loss over time, while the balance sheet provides a snapshot of assets, liabilities, and equity at a point in time. Stakeholders like shareholders, managers, and suppliers are interested in final accounts for different business and financial reasons.

Uploaded by

Jana omran
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Unit 3.

4 Final Accounts
Learning Intentions:
All: Identify and define final accounts (level 1-2)
Most: Explain the purpose of final accounts to
different stakeholders (level 3-5)
Some: Discuss how ethics affect accounting
practice (level 6-7)
3.4 Final Accounts
Final Accounts
Final accounts are financial statements compiled
by businesses at the end of an accounting period
(year, fiscal year, month, quarter, season). The
two final accounts you need to know are:

The profit and loss account


The balance sheet
Profit & Loss Account
• Also, call an income statement is a financial
statement of a organization’s trading/financial
activities over a period of time.

Purpose:
*To show profit or loss each period
*To check for surplus
*To check for deficit
* To Check for retained profit
Profit & Loss Account
Shows the trading position of a business at the
end of a specified accounting period
Limitations
of Final
Accounts
Balance Sheet
This shows the assets and liabilities of a business at a
particular point in time
Balance Sheet
Annual financial statement that all companies are
required to produce for auditing purposes, showing
information on the value of the organizations assets
and liabilities.
Key Words:
*Assets: Items of monetary value
*Liabilities: Monies owed by the business to their
vendors/suppliers
*Equity: The value/cash of the business, belonging to
the owners
Final Accounts
Why are the following stakeholders interested in a
businesses final accounts?
• Shareholders
• Managers
• Employees
• Customers
• Suppliers
• Government
• Competitors
• Financiers
• Local community
Ethics of Accounting
ACCA code of ethics and conduct
• Integrity
• Objectivity
• Professional competence and due care
• Confidentiality
Why are these principles important?
Limitations
of Balance
Sheet
Unit 3 Review Questions

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