Final accounts:

Definition::

Accounts made up only at the end of a firm's financial year. For a manufacturing firm, the final accounts consist of (1) manufacturing account, (2) trading account, (3) profit and loss account, and (4) profit and loss appropriation account. A trading firm's final accounts will include all of the above except the manufacturing account. Together, these accounts generate the gross profit, net income, and distribution of net income figures of the firm.

final accounts is in the Accounting & Auditing and Banking, Commerce & Finance subjects.

• Preparation of Final Accounts

1. Organisations need for additional information
2. Making up Final Accounts :: To derive the additional information needed
3. Preparing Trading and Profit & Loss a/c :: To derive information relating to profits
4. Preparing Trading and Profit & Loss a/c :: Illustration.
5. Preparing the Balance Sheet » To Derive Information relating to Position :: Illustration
6. Need for a Seperate "Trading a/c" and "Profit & Loss a/c"
7. Transfer of Net Profit to "Capital a/c" or "Profit & Loss Appropriation a/c"
8. Using Trial Balance in the Preparation of Final Accounts
9. What are Adjustments? Dealing with them in preparing Final Accounts
10. Trading Account » Ascertaining Cost of Goods Sold.
11. Trading Account » Closing Stocks, Opening Stocks Valuation.
12. Trading Account » Recording Closing Stock and Opening Stock.
13. Trading Account » Purchase Returns and Sales Returns.
14. Bases/Systems of Accounting » Cash, Mercantile, Hybrid.
15. Converting the Basis/System of Accounting » Cash to Mercantile ...
16. Finding Profits of a period under a Basis given profits under the other
17.
18. More Topics » Under Construction.
19.

• Adjustments

1. Expenditure » Outstanding and Prepaid
2. Incomes » Receivable and Prereceived
3. Drawings of Goods/Stock » Used up by owners Personally
4. Goods/Stock used in the building up or construction of an asset
5. Goods/Stock used for Advertisement Purposes
6. Valuation of Normal/Abnormal Losses
7. Abnormal Loss :: Accounting Treatment & Adjustments
8. Normal Loss :: Accounting Treatment & Adjustments
9.
10. More Topics » Under Construction.
11.

------------*****************--------------

Introduction:


Final Accounts works with your existing Money Manager data files to prepare a formal set of

end-of-year accounts.

Final Accounts handles Fixed Asset Depreciation, Audit Trails, VAT Reconciliation, Bank

Reconciliation, Trial Balance, Balance Sheet, Profit & Loss, Accounting Ratios, Capital

Allowances, Private Use, Tax Calculations etc..

Final Accounts adjusts itself automatically to cater for the differing requirements of Sole

Traders, Partnerships, Limited Companies, Charities etc..

With just a few minutes work you can add the extra information that will turn your Money

Manager data into a fully balanced set of Final Accounts.

When you install Final Accounts on your computer, a new FA button appears on your Money Manager

toolbar. When you click on this button, the menu and tool-bar change to give you access to the

Final Accounts functions. You can go back and forth between the Money Manager and Final

Accounts menus at the click of a button, and have reports etc. from both programs open on the

screen simultaneously.

Final Accounts is described over several pages, click on the line of buttons above to see each

page. Several pages will contain small screenshots and reports, you can click on these to see

a full-size version.




------------*****************--------------



A few extra items of information are required to turn your Money Manager data into a balanced

set of final accounts:
Business Type
You set the business type to Sole Trader, Partnership (up to 8 partners), Limited

Company, Club or Charity, and Final Accounts will adjust itself automatically to cope with the

differing requirements of that type of business.

Accounting Categories
You assign standard accounting categories (such as Sales, Cost of Sales, Overheads,

Long-Term Loans, Directors Emoluments etc.) to each of your Money Manager Account and Class

Codes, so that Final Accounts knows where to put them on the P&L and balance sheet.

Terminology
Many terms used in Final Accounts' reports and screens can be changed to suit your

circumstances. For example a charity may wish to substitute "Revenue" for "Sales". You can

change the wording for most sections of the Profit and Loss and Balance Sheet reports, as well

as the categories of Assets.

Previous Year Data File
If you specify a data file for the previous year, Final Accounts can transfer

appropriate data from it for the start of the current year, and also show the comparative data

for last year alongside the current year on the P&L and Balance Sheet (it will also show it

with the change in absolute or percentage terms).

Opening Entries, Closing Entries, Journal Entries
Entries may be made for accruals and prepayments relating to different accounting

periods.
One year's Closing Entries are automatically reversed to form the Opening Entries for the

following year.
You can also make Journal Entries at the end of the year to reassign expenses or to reproduce

your accountant's Journal Entries.

Stock
The value of stock (if appropriate) may be entered for the end of each month. You may

also enter different sets of stock values for several different departments, in order to

produce departmental Profit and Loss reports.
------------*****************--------------


Trial Balance:::



The Trial Balance is available as a simple end-of-year statement showing the balances of all

the Accounts and Classes (which add up to zero when the accounts are in balance), or as an

Extended Trial Balance with columns for Opening Balance, Debit and Credit during the year,

Closing Entries and Final Balance.



------------*****************--------------

Profit and Loss:


The Profit and Loss report can be produced in a wide variety of formats.

It can be fully detailed, semi-detailed or abridged:
------------*****************--------------



------------*****************--------------
Balance-sheet:


The Balance Sheet is available as either
Assets vs. Liabilities, or
Assets vs. Capital

You can specify the level of detail, e.g. showing each bank account balance on a separate line

or showing the total balance for all bank accounts on a single line.

You can have a second column showing the balance sheet for last year, and a third column

showing the difference, either absolute or as a percentage:


----

You can also have a balance sheet with a column for every month or quarter in the accounting

period.

The layout of the balance sheet is adjusted according to whether it is for a sole trader,

limited company etc..

There is also an Opening Balance Sheet to show that the accounts balance at the start of the

accounting period.

Most of the terms used in the headings can be changed (e.g. "Work in Progress" instead of

"Stock").

------------*****************--------------



------------*****************--------------

Assets:

There are seven user-defined categories of Fixed Assets which may be assigned to your Class

Codes. Thus when you buy a van the system knows that the class code you have used is in the

Motor Vehicle category of fixed assets.

For each category you may enter the percentage Depreciation Rate (for reducing balance

depreciation) or an absolute amount (for straight-line depreciation).

Brought-Forward Cost and Depreciation balances are entered manually for the first year, and

read automatically from the previous year's data file for subsequent years.

-----

Additions and Disposals during the year are extracted automatically from the Money Manager data

file, and disposal write-offs and losses are calculated automatically.



------------*****************--------------



------------*****************--------------
Tax-caculation:

Capital Allowances (WDA)
This is the calculation of the tax-deductible element of fixed asset depreciation. A

"pool" is maintained and carried forward from year to year, and WDA rates or amounts are

assigned to each category of assets.

Private Use of Expenses
Any category of income or expenditure may be assigned a percentage for private use.

The program can then calculate the total private use amount for the year and take it into

account in the tax calculation.

Tax Calculations
You can set the appropriate Tax and NIC rates yourself, and enter personal tax

allowances and pension contributions where appropriate. For partners (up to 8) the income to be

taxed is divided according to percentage share and the tax is calculated for each partner.
------------*****************--------------



------------*****************--------------


------------*****************--------------



------------*****************--------------


------------*****************--------------



------------*****************--------------
Balancing Report:

This useful report shows the state of balance in various parts of the accounts. If any

imbalances are found, the system will give the probable reasons for the imbalance, and by

clicking on the area of imbalance with the mouse you can soon get to the root of any problem.


Cash Flow Statement:
The Cash Flow Statement shows the money that came into the business during the year,

and where it all went:


Bank Reconciliation:
The Bank Reconciliation is a formal report establishing the relationship between your

accounts and your bank statements:


VAT Reconciliation:
This report compares the VAT due each month (or quarter) with the VAT actually

declared:


Accounting Ratios:
Accounting Ratios reveal the underlying financial health and direction of the business

or enterprise.
You may show comparative figures for up to 6 past years:



Duplicate Entry Detection:
There is an option for going through all the transactions in the accounts to detect any

possible duplicated entries.

InfoZoom:
You can click on numbers in reports to see in detail how that number is made up.

Calculator:
Fully functional calculator that can be used on its own without Final Accounts:


Help and Support:
The printed manual is clear and concise, written by non-accountants for

non-accountants. It includes installation instructions, examples, illustrations, hints, index

etc..

On-screen help is available at the touch of a button. Sample data files are provided to help

you learn and experiment before starting on your own accounts.

All Moneysoft products come with free telephone support.

------------*****************--------------



------------*****************--------------
Lesson 1: Adjustments made to the Trial Balance; capital expenditure and revenue expenditure;

calculating accruals and prepayments; bad debts; calculating the value of stock

Lesson 2: Using the Journal; double entry to be used for the most common year-end adjustments;

making Journal entries in order to record adjustments made in the ledger accounts

Lesson 3: Extending the Trial Balance to include Journal entries , accruals and prepayments;

calculating the profit , or loss of the business

Lesson 4: Preparing a P&L account and Balance Sheet; preparing a profit and loss account and

balance sheet; calculating the gross profit percentage; calculating the mark up percentage

Lesson 5: Closing off the ledger accounts; identifying which balances are transferred to the

next accounting period and which are transferred to the Profit and Loss account

------------*****************--------------