How to Prepare Financial Statements: Essential Requirements

At the end of certain specific period you would need to close the books of accounts with the assistance of a Melbourne accountant. While preparing a financial statement, must keep in mind that it is a document that contains information about financial health of your business or profession. So, must follow the below listed guidelines:

  • Prepare a financial statement in such a format that you can present to current and potential investors and financiers and also ensures that the document should offer you the opportunity to take an objective look at your numbers before you can plan a course of action.
  • Ensure proper classification of the receipts and expenses in to specific groups of accounts
  • Ensure accuracy of the accounts of all figures and classification of accounts in different heads of accounts.
  • Reconcile all the balances standing in the books of accounts.
  • In case you feel any rectification, pass necessary journal entries to ensure proper reclassification of the expense and booking in the proper accounts by making debit in one account and credit in to the other account.
  • Ensure to see your accounts in the way as if someone outside your company examines that so that he gets a favourable impression from reviewing these documents.
  • Prepare your financial statements keeping in view of all those who would be interested in seeing your accounts, e.g., potential investors, creditors, customers, suppliers, shareholders, auditors, Industry analysts and fund managers, Government regulators, etc., so that they may not get any negative impression of your business standings and creditability.

So, you need to take care that your financial statements enable them to understand well about the goal of your business, potential gain and risks involved in the business investments or credits.

 




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