Final accounts, also known as financial statements, are the set of financial reports that summarize a company’s financial performance and position at a specific point in time, such as the end of a financial year. These accounts provide a snapshot of a company’s financial health and include the balance sheet, income statement, cash flow statement, and (if required) statement of changes in equity.
The balance sheet shows the company’s assets, liabilities, and equity at a specific point in time. The income statement shows the company’s revenue, expenses, and net income for a specific period, such as a year or quarter. The cash flow statement shows the company’s cash inflows and outflows for a specific period. And the statement of changes in equity shows the changes in the company’s equity over a specific period.
Final accounts are important for both internal and external purposes. They are used by management to assess the company’s financial performance, identify potential issues and make informed decisions. They are also used by external stakeholders such as investors, creditors, regulators and tax authorities to evaluate the company’s financial health, performance and compliance with legal requirements.
It’s important to note that the preparation of final accounts usually requires auditing by an independent auditor, this process ensure that the financial statement are accurate and reliable, it also provide assurance that the financial statement presents a true and fair view of the financial position of the company.
