There are three basic accounting statements, as follows:

• Profit and Loss Statement
• Balance sheet
• Statement of cash flows

Each statement provides valuable data for users of financial information.

Imagine that you are operating the small business that you opened in the previous unit.

• Which of the three basic accounting statements do you feel would the most important in your day-to-day operations?
• Why do you feel this accounting statement is the most important?
• List some additional advantages and disadvantages to the accounting statement your peer selected.
• Discuss why you agree or disagree with the rationale that your peers gave for their selected accounting statement.