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In this assignment I ma going to prepare a trading and profit and loss account for the ended 31 of October 2006 for Alex Ali enterprises

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Introduction

Unit 10 final accounts Introduction In this assignment I ma going to prepare a trading and profit and loss account for the ended 31 of October 2006 for Alex Ali enterprises. Trading & profit and loss for the year ended 31st October 2006 Task 2 The profit and loss account: The profit and lose account shows how much money an organisation made over a period of time, most organisation use it for one year. It shows how much profit was made and what losses occurred over the period of time. It also helps the organisations to keep track of records and can use it whenever they see something different or bad than their previous records. The profit and loss account shows the costs of the past year, it help the business to make decisions about their self by looking and observing the previous years records. The profit and loss account is a summary of all the business actions, for the director of the business, shareholder or anyone who might want to invest into it. Like shareholders in a limited company, they are mostly interested in trends in profit because it determines how valuable their part of the business is. ...read more.

Middle

The tax is usually cut from the profits the company makes. Another part of the net profit is that the net profit is then divided between the shareholders which will be split between them. The net profit will go to itself meaning the remaining profit will go to the company so that they can invest the money in their company may be to 3exapnd their business or to make a new product or improving their quality. The importance of each component of the profit and loss and appropriation account Profit and loss- the profit and loss account is accounts that are done so that the business can determine what is to happen in the future, for the business in financial terms. Trading account- the importance of a trading account is that it shows the business activities it has done, as in has the business brought in new stock. Appropriation account- the importance for this is that it shows all the money that is leaving the money. The money leaving will be the tax and the money for the shareholders. ...read more.

Conclusion

A balance sheet shows the value of a business. It shows what it owns and owes, its assets and its liabilities on a particular date. Balance sheet accounts is involved with fixed assets and current assets Assets are things that the company owes and anything that has a value to it. A balance sheet account is an account that gives you a statement of a business in finance on any date the business chooses to look at. The main aim of balance sheet is to see the wealth and the value to the company and it shows the assets employed and capital at work in the company it also shows the owners or shareholder how the business is doing whether they are making profit or loss and the organisation can also use the balance to see the data of last year so that they can compare their last year data with their current year data it let them know where the money went who the money went to.The balance sheet is very important for many reasons because it enables different stakeholder to make decisions about the company stability and the ability to pay its debts and the ability to expand their business ?? ?? ?? ?? Mohammed Hadi nazzari ...read more.

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