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There are three basic accounting statements, as follows:

  • Profit and Loss Statement 
  • Balance sheet 
  • Statement of cash flows

Each statement provides valuable data for users of financial information.

Imagine that you are operating the small business that you opened in the previous unit.

  • Which of the three basic accounting statements do you feel would the most important in your day-to-day operations? 
  • Why do you feel this accounting statement is the most important? 


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