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Answer» Principal Objective:
The main purpose of preparing balance SHEET is to know the financial position of the business at a particular date.
Subsidiary Objectives:
THOUGH the main aim is to know the EXACT financial position of the firm at a particular date, yet it serves other purpose as well.
- It gives information about the actual and real owner’s equity. Though the capital of the owner indicates owner’s equity, yet some other LIABILITIES are to be accounted for against it also.
- It helps the firm to make PROVISIONS against possible future losses. A provision is made in the form of the Reserves.
Principal Objective:
The main purpose of preparing balance sheet is to know the financial position of the business at a particular date.
Subsidiary Objectives:
Though the main aim is to know the exact financial position of the firm at a particular date, yet it serves other purpose as well.
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