Explain why a business prepares an income statements and balance sheet at its financial year end?

Question

Explain why a business prepares an income statements and balance sheet at its financial year end?

Answer 1

Publicly traded businesses must, as their shareholders have a right to know their financial position as they are invested in them. Not to mention, it would be pretty difficult for private and public companies alike to complete their property and income taxes without having these statements and records.

Answer 2

-to shows where the company stands in a financial terms at a specific date.

-provide information about economic resources,claims to resources and changes in resources and claims.

-provide information useful in making investment and credit decision.

Answer 3

err because they have to pay taxes, and the government charges you every year

Answer 4

Tax purposes, and also to know what the actual worth of the business - depreciation, amortization ect.  It is also a great comparison from the year before, and you can get a clear financial picture of your business.