The following points or precautions are taken into account while preparing the final accounts:
If trial balance is not given in the question, than 1st of all trial balance is to be prepared and if there in any difference, it will be shown in the Balance sheet as Suspense Account.
Items given in the trail balance will be shown once either in Trading Account or Profit and Loss Account or balance Sheet, but adjustments will be shown twice.
Items given in the debit side of trial balance will be shown either in the credit side of Trading Account or Profit and Loss Account or the Asset side of balance.
Items given in the credit side of trial balance will be shown either in the credit side of Trading Account or Profit and Loss Account or in the liabilities side of Balance Sheet.
All the Nominal Accounts whether relate to income or expenditure will be shown either in Trading Account or Profit and Loss Accounts only, not in the Balance Sheet.
The total of both the sides of balance sheet must always be equal.
If trial balance is not given in the equation and it is not clear from various items as they are the incomes or expenditure, they all should be treated as expenditure.
If wages and salaries’ are given under same head, this item will be shown in the Trading Account and if salaries and wages as given under the same head, these items will be shown in profit and loss account.
If some items of expenditure is not clearly shown as factory expenses, they will be shown in profit and loss account and if they are given, these must be shown in Trading account.
Income-tax paid is the personal expenditure of the proprietor hence this item should not be charged to Profit and Loss Account and if it is paid out of business it should be treated as drawings.
Sometimes, some hidden adjustments are given; we should take these considerations into mind while preparing final accounts.