THE FINAL ACCOUNT

The primary objective of any business concern is to earn income. Ascertainment of the periodic income of a business enterprises is perhaps the important objective of the accounting process. This objective is achieved by the preparation of profit and loss account or the income statement. Profit and loss account is the generally concidered to be greatest and interest and importence to end users of accounting information.

The profit and loss account enables all considered to find out whether the business operations have been profitable or not during a particular period usually the profit and loss account is accompained by the balance sheet as on the last date of the accounting period for which the profit and loss account is prepared. A balance sheet shows the financial position of a business enterprises as of a specified moment of time.

It contains a list of the assets, the liabilities and the capital of the business entity as of a specified date, usually at he close of the last day of a month or a year. While the profit and loss account is categorized as a flew report, the balance sheet is categorized as a ststus report (as on particular date).