Creditors, The basic goals of financial reporting are to keep your credits and debits in order so that you may know how much money you have on profit and how much money you spend for various items for the business. It basically prioritizes what is needed so you can see it on paper and have documentation. The first step that you have to do is start a journal that shows the debits and credit so that one’s transaction on a particular day and what two accounts that transaction affects, you do this for the entire month of all transactions. Then the next step you have your ledger that separates the accounts so that you may add up th total for that account and have them all in order. The third is the trial balance form where you had placed your accounts and totaled them but are now on a t account table to show that the debits and credits are equal which they must always be balanced on both sides. If they are not balanced then there is a mistake somewhere in the reports. All these steps that are needed to get the run down of the account support the principles of accounting you have your credits and your debits and must know which is an asset which stays as your debit and the liabilities which you owe and to have a successful business these must stay balanced if you owe to much your business can collapse.

Regards,
Ariel