Definitions [4]
A trading account is a simple statement that shows whether a shop or business made a profit or loss by buying and selling goods during a year by comparing total sales and stock with buying costs and direct expenses.
A Profit and Loss Account is an account in the books of a business that records all indirect incomes and expenses for a period to find out whether the business made a net profit or a net loss.
A balance sheet is a financial statement that shows the assets, liabilities, and owner’s equity of a business at a specific point in time, providing a clear picture of its financial position.
Adjustments in final accounts are changes or entries made at the end of the accounting period to include any income or expenses that were missed or need to be updated so that the financial statements show the true financial position of the business.
