Final Accounts
Trading and
Balance Sheet
Profit & Loss a/c
The aim of profit and loss account is to ascertain the net profit earned or net loss suffered
during a particular period.
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1.3) Balance Sheet
It is a statement showing the financial position of a business. Balance sheet is prepared by
taking up all personal accounts and real accounts (assets and properties) together with the net
result obtained from profit and loss account.
Balance sheet is defined as a statement which sets out the assets and liabilities of a business
firm and which serves to ascertain the financial position of the same on any particular date.
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