accurate inventory record also allows B u s i n e s s F i n a n c e
Explain how the Supply Chain impacts the Balance sheet and income statement.
Why is it important to maintain good accounting records and accurate inventories? Use terms and examples from your text. Respond to your peers and cite your work.
The balance sheets and statements impact the supply chain in many different ways. Balance sheet show what the company’s assets and liabilities are at in a specific moment in time, The income statement show the total revenues and expenses for a period of time. The balance sheets do not show the companies performance where the income statements do. Companies use the balance sheets to be able to tell if they have enough assets to meet all their financial obligations, but the income statements are used for evaluating the performance and to figure out if they have any financial issues that they need to correct. For the lenders the balance sheet is used to see if they should extend the company’s credit anymore. The lenders used the income statement to decide whether or not the company’s are making enough profit to pay all its liabilities. By being able to be strong in both of these balance sheets and income statements it will be able to enhance their productivity and decrease the cost it will also improve the profitability. It’s important to maintain a good accounting records because it allows the business to be able to monitor their progress as well as prepare their financial statements. It also helps identify the source of their income and helps keep track of the businesses deductible expenses. It’s important for companies to keep an accurate inventory because it helps to ensure that they always have their high demand items on hand so that they will never come up short handed. Having an accurate inventory record also allows a business to follow sales trends. That companies can also differentiate between fast moving and slow moving product.
It is important to maintain good accounting records and accurate inventories because you have data that tell you whether you can take client requests or projects with the inventory on hand. you can review inventory records to identify inventory trends over time and make some predictions about inventory tat might run out faster than normal. when you don’t have accurate inventory it’s easy to run out of products and miss out on sales. when you keep accurate inventory you’ll catch problems right away, instead of months later. it is important to maintain good accounting records because you need to know what your financial status is on a regular basis. you have to know where your company stands daily, weekly, monthly, quarterly and annually. you need to know how much inventory you have and how much you need to order. these are all very important factors about why you should have good accounting records and without them the company will lose out on a huge profit. good accounting records helps you track each expense you have invested in your business and if you misplace the records it will create problems when completing annual tax returns.
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