PART: 06 FINANCIAL ACCOUNTING - GROSS PROFIT

 

VIDEO LINK

FINANCIAL ACCOUNTING

PART 06

 

FINAL ACCOUNTS OF SOLE TRADER

 

================== 

 

The important objectives of accounting are to measure the performance of a business in terms of profit or loss and to ascertain its financial position 

 

 

Financial statements

 

 Statement prepared by business concerns at the end of an accounting year to find out the profit and loss and to ascertain the financial position of the business as at the closing date. 

 

Final account of a sole trader usually include : 

 

 

Income Statement, 

 

shows the financial performance of the business in the form of profit or loss for a particular period. 

 

Income statement is divided into two namely;

• Trading Account and

• Profit and Loss Account 

 

 

Balance sheet 

 

shows the financial position of the business for a particular date.

 

 

Trading Account 

 

It is prepared to ascertain the trading result of the business 

 

Result of Manufacturing, buying and selling goods 

 

i.e., gross profit or gross loss.

 

It is a nominal acoount

 

 

===========================