To know the development of a company is very necessary to make financial statements, because the financial condition of a company are reflected in its financial statements. The financial statements created for the purpose you have in accounting principle. The following are several reasons why it is so important:
- To provide reliable financial information about the economic resources and obligations as well as the capital of a company.
- In order to provide reliable information about changes in net economic resources, a company which arises from the activities of the company in order to obtain profit.
- To provide information that helps financial statement users in the company's potential in generating profits.
- To provide other important information about changes in economic resources and obligations as information on spending and investment activity.
- To express a variety of other information relating to the financial statements which are relevant to the needs of users of the report, such as information about the accounting policies adopted by the company.
The financial statements created for the purpose of providing an overview of progress the company. So be historical financial statements as well as thorough and as a progress report. The financial statements consist of the data that is the result of a combination of the facts that have been recorded, the principles and practices of accounting and personal opinion.
Personal opinion, meant that although the accounting records have been set by the basic arguments that have been set that has become a standard accounting practice, but the use of depends by the accountant or the management company concerned.
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