Whenever a person starts off a business, it is taken into consideration that this business would continue for an indefinite period. Given such a scenario, it is not possible for a person to wait for eternity to get details regarding how a particular business is functioning in a correct manner. Hence, it is important that there be a specific period against which details of this can be taken.
The period that is taken for counting and detailing of financial gains is a year, post which a Balance Sheet is prepared. At the end of the year details associated with trading, profit and loss accounts, list of assets and liabilities can be prepared for a particular company to depict the amount of profit or loss a particular company has incurred in order to carry on business in a further manner.
Issues associated with preparing of Balance Sheet:
There are multiple issues that a particular organization can face in regards to preparing financial details of that company.
Given such a host of problems, one needs to be very careful of the adjustment sand addition that is made in regards to this account.