Conservatism 11. In order to put together all of the accounting and bookkeeping elements a company will do, and understand how all of these elements work together--we need to understand the actual bookkeeping process; that is, the exact mechanical process to keep sales, expenses, revenue, and income documented in all the right places so that we can provide accurate financial statements in a timely ⦠It's important that your accounts are accurate and up to date. From the following statements, identify the correct definition of a liability. Neutrality 7. a. The multiple-step profit and loss statement segregates the operating revenues and operating expenses from the nonoperating revenues, nonoperating expenses, gains, and losses.