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Accounting Principals Memo In any business no matter how big or small financial statements are crucial if achieving success is the ultimate goal. There are three main types of financial statements, they are: Income statement, balance sheet and statement of owner's equity. All three of these financial statements can be looked upon to see where changes can be made in a company to ensure better success. The income statement is important because it presents the revenues and expenses allowing a company to see the net income or net loss. It is prepared by simply subtracting the expenses from the revenues. The balance Approximate words: 395 Approximate pages: 2

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