Question

What are Financial Statements?

Answer 1

Financial statements are documents that provide information regarding the financial position and profitability of an organisation. The word "financial statements" is traditionally used to refer to only two statements:

1. The balance sheet, also known as the statement of financial position, presents the financial situation of a business on a certain date.
2. The trading account and profit-and-loss account (or income statement) that presents the net results of the business enterprise, namely, the net profit or loss incurred during an accounting period.