Final accounts definition
/What are Final Accounts?
Final accounts is a somewhat archaic bookkeeping term that refers to the final trial balance at the end of an accounting period . The financial statements are derived from this information, as part of the period-end closing process. This final trial balance includes every journal entry used to close the books, such as the following:
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Wage and payroll tax accruals
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Income tax accruals
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Asset write downs
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Adjustments to reserves for returns, bad debts , and obsolete inventory
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Customer billings
Thus, final accounts can refer to the final trial balance or the financial statements upon which they are based. The primary financial statements are the income statement , balance sheet , and statement of cash flows .
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Since final accounts refers to a company's ending account balances, which in turn are used to create financial statements, this means that the final accounts reveal the results of the business during a period, its financial position at the end of that period, and its sources and uses of funds during that period (which is the purpose of the financial statements). Auditors rely upon a client’s final accounts to conduct an audit of its accounting records and financial statements.
Final Accounting
A final account, or final accounting , can also be the summarized statement issued when a business transaction has been concluded. For example, when someone leaves a hotel, they are given a final accounting of what they owe the hotel. In the case of a hotel, the final accounting might include the per-night lodging cost, as well as the cost of meals, incidentals, room taxes, resort fees, and parking.
