Meaning of Financial Statements
Financial statements of a Company are the introductory and formal periodic reports through which the commercial operation communicates fiscal information to its possessors and colorful other external parties which include investors, duty authorities, government, workers, etc. These typically relate to (a) the balance distance ( position statement) at the end of the counting period, and (b) the statement of profit and loss of a. company. Nowadays, the cash inflow statement is also taken as an integral element of the financial statements of a company.
Nature of Financial Statements
The chronologically recorded data about events expressed in financial terms for a defined period are the base for the medication of journal financial statements which reveal the financial position on a date and the financial results attained during a period. The American Institute of Certified Public Accountants states the nature of financial statements of a company as, “ the statements. set for presenting a journal review of the report on the progress of the operation and dealing with the status of investment in the business and the results achieved during the period under review. They reflect a combination of recorded data, counting principles and particular judgements”.
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