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Chapter 3 discussion - I t is very important for any...

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It is very important for any company; large or small to keep proper accounting records. Below are some of the reasons why businesses should produce and maintain reliable financial statements: A. Running business efficiently: Proper record keeping helps organize most important business transactions and obtain reports of cash flow, balances of key accounts, and the company’s overall financial position at any given time. These are important elements of business regardless of a company's size, and can help resolve or reduce the risk of reporting inconsistencies. B. Budgeting and Forecasting: Staying within a budget is very import especially for small corporations as the cash flow is normally tight. Proper documentation helps track expenditure on a particular project which in turn will help determine if the project was profitable. Especially in bad times, the owners (decision makers) need to know when and where to cut costs. Having adequate financial
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