What are the financial statements?

Business & Management
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#1
  • Financial statements are summative reports in the sense that they report information gleaned through financial accountants’ or bookkeepers’ day-to-day bookkeeping activity. After all of the business’s income and expenses have been documented, financial accountants generate financial statements in the following order:

Income Statement
Statement of Owner’s Equity
The Balance Sheet
The Statement of Cash Flows

  • Financial statements give a clear picture of a company’s financial performance. They display assets, liabilities, earnings, and losses. We can only generate these statements at the end of all accounting operations. Let’s take a look at the goals and characteristics of financial statements.

  • Financial statements depend on factors like - Recorded facts, Accounting conventions, Postulates, personal experience decisions. These financial statements also include information on the company’s cash flows.

  • Creditors and investors can use this information to forecast the company’s liquidity and financial requirements. Finally, they discuss how enterprises affect society.

  • This is because it demonstrates how the company’s external influences have an impact on its operations.