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Understanding Financial Statements.
Preparing financial statements. Is the most important step in the accounting cycle because it represents the purpose of financial accounting. Fiscal yearconsisting of any 12 consecutive months. Recording in the journal based on the evidence supporting the occurrence of the financial process.
Some companies prepare financial statements monthly to keep a tight handle on the financial position of the firm. In other words the concept financial reporting and the process of the accounting. Financial statements must be prepared at the end of the companys tax year.
Calendar yearJanuary to December. Many companies prepare interim financial statements. Preparing the trial balance of totals and balances.
AR-C 70 Preparation of Financial Statements states that the standard is not applicable when an accountant prepares financial statements and is engaged to perform an audit review or compilation of those financial statements So if an accountant prepares financial statements as a part of a compilation engagement AR-C 70 does not apply. Preparing financial statements is perhaps one of the most important steps of the accounting cycle. Ad Download Our Financial Statement All 2000 Essential Business and Legal Templates.
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Including the balance sheet income statement statement of retained earnings and statement of cash flows. The preparation of financial statements is easy once youve mastered the accounting elements and know the different accounts that comprise them. A financial statement can be prepared for a company for any length of time and at any point in time.
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