Identify the correct sequence to be followed while preparing final account of a partnership firm.

(A) Profit and loss Appropriation A/c

(B) Profit and loss A/c

(C) Trading A/c

(D) Balance sheet

Choose the correct answer from the options given below:

(C), (B), (A), (D)

The correct answer is option 1- (C), (B), (A), (D)

The correct sequence for the final accounts of a partnership firm is:

(C) Trading Account: This account summarizes the buying, selling, and expenses related to the firm's trading activities, resulting in the gross profit.

(B) Profit and Loss Account: This account builds upon the gross profit from the Trading Account, incorporating operating expenses and income to arrive at the net profit or loss for the period.

(A) Profit and Loss Appropriation Account: This account takes the net profit or loss from the Profit and Loss Account and shows how it's distributed among the partners according to their profit-sharing ratio. It may also include allocations for reserves or other appropriations.

(D) Balance Sheet: This final statement presents the firm's financial position at a specific date. It shows the total assets, liabilities, and capital (including the final capital balances from the Partner's Capital Accounts).