Following are the main objectives of preparing final accounts of a partnership firm :
(1) To ascertain gross profit or loss : Through the preparation of trading account, a partnership firm can ascertain gross profit or loss.
(2) To ascertain net profit or loss : A partnership firm can ascertain net profit or net loss through the preparation of profit and loss account. The profitability of the firm can be seen from the profit and loss account.
(3) To ascertain divisible profit or loss : All personal transactions and provision of the partners with the firm can be ascertained through the preparation of profit and loss appropriation account.
(4) To know the financial status of the firm : To know the financial status of the firm balance sheet is prepared. It provides information about assets, receivables, payables and capital of the firm.
(5) For taxation purpose : To know the taxable income of the firm final accounts are prepared.
