Why do you think it is so important that financial records are maintained well? What would be a potential negative consequence be to not maintaining financial records properly?
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Explanation:
You need good records to prepare accurate financial statements. These include income (profit and loss) statements and balance sheets. These statements can help you in dealing with your bank or creditors and help you manage your business.
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To correctly assess the financial position financial records should be well maintained.
Explanation:
- It is very important to have properly maintained financial records as it helps in assessing the financial position in a clear manner.
- Financial records also help in understanding the income and expenses which can be further helpful in budgeting and planning the utilization of cash in hand.
- Moreover, if financial records are not maintained properly there are chances of over expenses or improper utilization of funds.
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