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unit-12-basic-concepts-relating-to-final-accounts

Unit-12 Basic Concepts Relating to Final Accounts

In this unit you will learn about the basic accounting concepts or principles which guide the preparation of final accounts.

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What is the purpose of preparing the Profit and Loss Account?

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Learning Pundits Content Team

Written on Jun 25, 2019 5:06:51 PM

Normally, the final accounts are prepared at the end of each accounting year. The Profit and Loss Account is prepared for the year so as to ascertain the profit earned or loss incurred during that year, and the balance sheet is prepared as at the end of the year, so as to show the financial position as on that date. However, for internal management purposes, accounts can be prepared even for shorter periods, say monthly, quarterly or half yearly.