Students can go through AP Inter 1st Year Accounts Notes 11th Lesson Final Accounts will help students in revising the entire concepts quickly.
Final Accounts Class 11 Notes AP Inter 1st Year Accounts 11th Lesson
→ To know the Business results and financial position at the end of a particular period, the trader prepares various statements which are called final accounts.
→ Final accounts consist of two accounts and a balance sheet.
→ The two accounts are
- Trading account,
- Profit and Loss Account.
→ The Expenses and Incomes are of three types as, Capital Nature, Revenue Nature and deferred nature.
→ Revenue expenses and Incomes appear in either Trading Account or in Profit &. Loss A/c. Whereas, capital nature expenses/ incomes appears in the Balance Sheet.
→ The Revenue part of deferred nature appears in Trading and Profit & Loss a/c, whereas, the capital part of deferred expen-diture and Incomes appear in the Balance Sheet.
→ Trading Account : Reveals either Gross Profit or Gross Loss which can be trans-ferred to Profit and Loss Account.
→ Profit and Loss Account: Reveals either Net Profit or Net Loss, where,
Net Profit = (Gross Profit + Incomes) + Gains – (Expenses and Losses)
→ Balance Sheet: A statement that shows assets and liabilities. It is divided into two parts namely – Assets, and Liabilities. Left hand side is called liabilities side and right hand side is called assets side.
→ Liabilities are : Capital + Net profit – Drawings, Creditors, Bank Loans and Bills payables etc.
→ Assets are : Current Assets, Fixed Assets, Closing Stock etc.