Short Course on Experts – Getting to Square 1

Benefits of Preparing Financial Statements to an Organization Accounting services are important in any business regardless of its size, this is important because the company will have healthy finances when its expenditure and earning are controlled. Accounting is also important because it makes the company legally compliant with the set laws and regulations. Financial statements are records of the financial activities of an entity; they provide an overview on the long-term and short-term financial condition of an organization. All the financial statements prepared should portray a true and fair view of the actual financial position of an entity, these statements that are true can only be prepared by an individual who has undergone training in accounting and has acquired all the necessary skills and experience in preparing the financial statements. These financial statements ought to likewise be prepared at the right time and when they are required. There are normally four types of financial statements an organization prepares and all have unique purpose but they are somehow related, these are; income statement, statement of financial position, statement of cash flows and statement of owners’ equity. The profit and loss account demonstrates the organization’s profitability amid a particular year; it sums all the income and deducts every one of the costs incurred amid the year. The income statement has four components these are; sales, cost of sales, gross profit and operating expenses.
Getting To The Point – Bookkeeping
The balance sheet demonstrates every one of the assets of an organization and owners’ equity of a particular timeframe, it has key segments these are; assets where it includes the currents assets and the non-current assets of the company, there is liability which shows the current and non-current liabilities of the organization, and it additionally has owners’ equity which represents what the investors have contributed.
Getting To The Point – Bookkeeping
The statement of owners’ equity shows the changes that have occurred in the company retained earnings over a certain period of time. The statement of cash flows shows how changes in the balance sheet and the income statement will affect the cash and cash equivalents. The financial statements prepared should be reliable and simple to understand for the reader. People from different walks of life will use the financial statements prepared by the organization. The organization will be able to know its financial position when the financial statements are prepared. Stakeholders as well as shareholders will be able to know how the company will be performing when they review the financial statements. Investors doing their due diligence on the organization will know how it is performing by checking their financial statements , this will empower him settle on a choice on whether to invest on that organization or not.