In Business: Keeping Accounting Records

Keeping Accounting Records by Irv Chasen Accounting and CPA firms generally provide their clients with a packet of standard information when they submit the completed financial statement. This standard packet includes the following documents: • Letter of transmittal • Balance sheet listing the client's assets and liabilities • Statement of income and retained earnings—this is commonly known as a Profit and Loss or P and L Statement • Statement of change in financial position (distribution of capital) • Notes on the financial statements When receiving these documents, the contractor's first question is usually, "Am I making any money?" Most turn immediately to the P and L Statement, assuming that it provides all the information they need to know about the financial position of their business. Logically, the P