Accounting plays a critical role in operating a business as it helps the business people track their earnings and expenses. Accounting also ensures statutory compliance and provides investors, management, and the country's government with quantitative financial information which can be used in making future business decisions. There are 3 important financial statements generated by one's records.The income statement delivers you information about the profit and loss.The balance sheet presents a clear picture of the financial status of the business on any particular date.The cash flow statement acts as a bridge between the income statement and the balance sheet. It reports the cash generated and spent during a specific time.