In: Computer Science
in every business there is a pressing need to prepare and
maintain financial statement due to following reasons:-
1)To take corrective actions to increase business:
clear financial reports/balance sheets reveals profit or loss in
the business. In the case of loss corrective actions can be taken
to cover the loss
2)To attract the investors:
If owner of the business knows about the profit/success of the
business, it is not sufficient to attract the investors
All the profit/success/policies of the business should be well
documented to prove the success of business. Therefore all the
financial statements and reports can be used to convince the
investors
3)Tax payment:
Every business organization is expected to pay various types of
taxes to the government.
4)Business expansion:
To expand any business, it is necessary to decide the budget,
targets to be achieved. All these things are only possible if all
the financial statements and reports are well maintained.