Financial statements reflect the current financial health of the business and its financial performance over the last accounting period. The financial statements are created from the information contained within the general ledger. At the end of the accounting period, each account is totaled up to create a trial balance. The total debits and credits in all accounts should be equal. If they are not, the accountant must re-check the balances of each account and make adjustments or corrections where necessary.
When the accounts are adjusted and correct, the accountant can enter summaries of the information contained in them into the financial statements