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This is a good question. It is not only important for the business to have a good accounting system, but also to know the various factors that may affect the company’s finances.
Inventory accounts are a good example of the latter. You may have seen a manufacturing company’s balance sheet that shows how much of each product it has sold in the past. An inventory report would show you how many units of each product sold in a particular period. This report would also have an overview of each product, showing that the company sold exactly one unit of each product in that period.
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