why the statement of affairs is prepared?
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Explanation:
The Statement of Affair is a summary of a Comapny's assets and liabilities. It states the net book value and amount expected to realise at the date of Insolvency of the business. Accompanying the balance sheet is a list of creditors and shareholders.
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The purpose of statements of affairs is to show the current financial position of the company.
It provides details of the company’s assets and liabilities. It should be prepared in a given format. It helps the stakeholders to understand the company’s affair better. Statement of affairs is also known as the balance sheet. It is prepared in a single entry system. The accuracy of the statement of affairs is not reliable.
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