Annual accounting is the process of recording, summarizing, and reporting a company's financial transactions over a period of one year. This process culminates in the preparation of annual financial statements, including the balance sheet, income statement, and cash flow statement.
These statements provide a comprehensive overview of the company's financial performance and position, which is essential for stakeholders such as investors, creditors, and government agencies. Proper annual accounting ensures regulatory compliance, aids in financial planning, and provides valuable insights for business decision-making.
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