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HomeBusiness TheoryFinanceThe importance of business accounts

The importance of business accounts

Photo by Pavel Danilyuk: pexels

Business accounts are produced to meet the needs of their users. Typical users and the use they make of accounts are shown below:

There are three main financial statements that are produced by company accountants.

These are:

1. The Balance Sheet sets out the financial position of the company at a particular moment in time e.g. the year-end.

2. The Profit and Loss Account shows how the profit or loss of the business has been generated.

3. A cash flow statement setting out the cash inflows and outflows to the business during a particular period of time.

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