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Question

Steps of preparing Final Accounts is -
(a) Trading Account
(b) Profit and Loss Account
(c) Balance Sheet

A
True
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B
False
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Solution

The correct option is A True
Final accounting is the last step of accountancy in any business. It involves three series of steps or three accounts, Trading account, Profit and Loss account and then Balance sheet. This order must remain same under any situation.
The order of preparing accounts must be same because first gross profit/loss has to be calculated and then only net profit/loss will be calculated and after that all assest and liablilities will be presented. Hence, the statement is true.

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