LivJohnson2005
Answered

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!! PLEASE HELP !!
Romelle Woods and Ahti Indihar each won small businesses. Ms. Woods prepares an income statement and balance sheet at the end of each day for her business, in order to make business decisions. Mr. Indihar prepares an income statement and balance sheet for his business only at the end of each one-year fiscal period, when preparing tax reports. Which owner is using the better procedure? Explain your answer.

Sagot :

sebastiansierraocm

Answer:

Ms. Woods is using the better procedure.

Explanation:

Although is not necessary to prepare a balance sheet and an income statement daily, they should be prepared as often as feasibly possible anyway, because both financial statements provide crucial information to take decisions.

The balance sheet provides a snapshot of the assets, liabilities and equity of the firm, while the income statement provides a more fluid picture of what the firm has earned in the form or revenue, and lost in the form of expenses, over a specific period of time.

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