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Financial statements and its nature: Best Nature of Financial Statement Assignment Help Service provides a summary on this topic. If you are satisfied and convinced then you can seek help from our experts.
The collection of information based on accounting in a methodical, reasonable and constant manner with is users are the simplest way of explaining about financial analysis. It is well known that statements are made to refer income statements and balance sheet. But there are many factors that help to derive statements that will deal with Nature of Financial Statements. The factors are
It uses the principles of accounting that are generally accepted to record all transactions that are done in a company and noted in the account books as per the guidelines of GAAP as it has concepts and assumptions. Thus, values of inventory at the end of the year are influenced by these principles.
Facts that are Recorded
Statements contain the facts related to transactions that are already recorded in accounts book but the other factors like human resources are not recorded as it may not be calculated.
Judgment on Personal Level
Statements are made by the guidelines of GAAP but their application may depend on the judgment of accountant solely.
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Certain principles may be based on the satisfaction of people who had been using it for a long time. In simple words, it is the usage of the usual practices of both economic and social life of humans that have been accepted to form the principles of accounting.
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