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CHAPTER - 6
PREPARATION OF FINAL ACCOUNTS OF SOLE PROPRIETORS
UNIT: FINAL ACCOUNTS OF NON-MANUFACTURING ENTITIES
1. Non-manufacturing entities are the trading entities, which are engaged in the purchase and sale of
goods at profit without changing the form of the goods.
2. Final Accounts is the next step after the preparation of trial balance which is divided into following
two part
(1) Income Statement: It is prepared to know the profit of the enterprise. It is divided into two parts
i) Trading account ii) Profit & Loss account
(2) Position Statement: It is prepared to know the financial position of the business enterprise. Under
this the statement prepared is Balance Sheet
In the books of...
Trading A/c for the year ending...
Particulars Amount Particulars Amount
To opening stock By sales
To purchases Less:Sales Return
Less: Purchases return By closing stock
To carriage or freight inward By gross profit
transferred to P&L (if
To wages any)
To gross profit transferred to
P&L
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