There are two major _____ that must be prepared and are essential to the operation of a business: the profit and loss (income) statement, sometimes referred to as the P&L sheet, and the balance sheet.

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Financial statements are essential to the operation of a business and the two main types are the profit and loss statement and the balance sheet. Tax forms and charge accounts may be important for specific aspects of the business, but they are not as critical to the overall operation as financial statements. Budgets are important for planning and forecasting, but they are not the same as financial statements.

There Are Two Major _____ That Must Be Prepared and Are