Preparing financial statements involves several steps:
Record Transactions: All financial transactions must be accurately recorded. Adjust Entries: Make necessary adjustments for accruals and prepayments. Prepare Trial Balance: Ensure that the debits and credits are balanced. Compile Statements: Prepare the balance sheet, income statement, statement of cash flows, and statement of changes in equity. Review and Audit: Review the statements for accuracy and have them audited if necessary.