After the completion of preparing Trial Balance, Final Accounts are prepared to ascertain the net result i.e. profit or loss and the financial position of the business. In other words, a business can find out the profit or loss made by the business through the final accounts. They are prepared at the close of the accounting period with the help of trial balance. It is the final step of accounting circle which includes:
- Trading Account.
- Profit and Loss Account.
- Balance Sheet.
- To ascertain the net result i.e. profit or loss made by the business firm during the accounting period.
- To know the financial position of the business i.e. assets and liabilities of the business as on given date.