The preparation of the financial statements is the seventh step in the 9-step accounting cycle. We will take a look at them first before getting into the whole process for you to have a picture of what we are trying to produce in an accounting system. The financial statements are the end-product reports of accounting.
This chapter of the Accounting 101: Basics course presents the components of a financial statements package. The lessons here focus on a service-type sole proprietorship business.
The preparation of the financial statements is the summarizing phase of accounting.
A complete set of financial statements is made up of 5 components: Statement of Comprehensive Income, Statement of Changes in Equity, Balance Sheet, Statement of Cash Flows, and Notes to Financial Statements.
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