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Financial notes serve as a way for a company to provide additional explanation of various portions of the financial statements. It functions as a supplement, providing clarity to those who require it without having the information placed in the body of the statement.
It further clarify accounting procedures used by a company, as well as to divulge information that has occurred during and immediately after the close of the accounting period that are not represented with figures on financial statements.
The preparation of the final notes are the accounts summaries all the accounting information recorded in the original books of entry and the ledgers.
The final accounts or financial statements consists of:
1. Prrofit and loss account or income statement, which is prepared to know the profit earned or loss suffered by the business during a specific period.
2. Balance sheet, which is prepared to know the financial position of the business on a particular date.
These two items or statements are collectively known as "final accounts or financial statements
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