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unit-7-final-accounts-i

Unit-7 Final Accounts I

In this unit you will learn about the basic framework of final accounts including their presentation in vertical form.

Why firms use vertical form of presenting the final accounts?




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Learning Pundits Content Team

Written on Apr 16, 2019 4:05:13 PM

  • The Trading and Profit and Loss Account and the Balance Sheet have so far been presented as a two-sided statement. But, in practice, it is not necessary to present the final accounts in this form.
  • Nowadays many firms present them in a simpler and more intelligible farm which is called a 'narrative style' or 'vertical presentation’.
  • According to this style the Trading and Profit and loss Account as well as the Balance: Sheet arc shown in the farm of vertical statements.
  • This form of presentation is adopted by many companies for publication of their final accounts. It helps the users of financial statements to appreciate the significance of different items without any difficulty.
  • They can easily interpret the data and judge the profitability and the financial position of the company.