For you to be able to know if your business is performing according to its mandate there is need for tracking. Tracking can be done through the use of financial statements. The statements serve the purpose of identifying the prices, the cash flow and even the margins. You will also get an easy time when it comes to paying tax.
This statement provides an overall financial snapshot of your small business. As an equation, it looks like liabilities + owner’s equity = assets. The two sides of the equation must balance out.
There are two types of assets: current and fixed.