Courses for Kids
Free study material
Offline Centres

Financial Statements

Last updated date: 01st Mar 2024
Total views: 345k
Views today: 6.45k
hightlight icon
highlight icon
highlight icon
share icon
copy icon

Introduction to Financial Statements

One of the main aims of the field of accounting is to ensure that a proper and systematic record is kept of certain financial transactions. These records are supposed to be communicated to different stakeholders, which in turn helps the company in the best way. So, in order to properly communicate these pieces of information, there are certain statements that are made by the parties. These are known as Financial Statements. With the help of our notes, students will be able to gain knowledge about Financial Statements meaning and much more.

An Overview of Financial Statement

To put it in simple words, a financial statement can be defined as a systematic and properly organized way of representing certain financial data that is collected. These are the statements that help in representing the performance of the company from a financial perspective in the best way. Also, it helps in determining the fiscal positions of the business too. When we talk about financial statements, we tend to refer to these basic features.

  • Profit and Loss Account or Income Statement.

  • Balance Sheet or Position Statement.

  • Cash Flow Statement.

What is a Balance Sheet?

In the field of financial accounting, the balance sheet definition can be given as a summary of different financial balances that an organization or a person can have. This could be a sole proprietorship, a corporation, a business partnership, a private company, a non-profit organization, or a government operation. Students can find out more about the Balance sheet meaning from the chapter.

What is Trial Balance?

Most students often want to find out the Trial Balance meaning and we are here to provide that information. The trial balance definition can be given as a worksheet in bookkeeping which can be used to determine the entire balance of all the different ledgers. These are compiled properly into the credit and the debit accounts in total. Any company would be preparing a trial balance at a certain period of time in order to keep track of the balance.

After learning about the balance sheet statement, students need to know the cash flow statement meaning and the definition of the income statement. Here we are providing both.

What is a Profit and Loss Statement or Income Statement?

Another one of the main questions that students often have is regarding the income statement definition. Well, the income statement or profit and loss statement can be defined as one of the examples of a major financial statement that tends to represent the revenues and the expenses that are done by the company in a particular period of time. The profit and loss statement is also responsible for determining how these revenues are then transformed into certain net profit or net income.

What is a Cash Flow Statement?

Here is another common question that students have to answer in the examinations regarding the financial statements. Most students want to know the cash flow statement definition. Well, in terms of financial accounts, we can define the cash flow statement as the statement which shows different changes that occur in the balance sheets and the accounts. Also, it depicts the effect of income in the cash as well as the cash equivalents. A cash flow statement can also be helpful in breaking down the analysis when it comes to operating, financing, and investing in certain activities.

Having knowledge of financial statement definition is extremely important for students these days. With the help of the notes which depict the income statement meaning and the profit and loss account meaning, students can aim for good marks in the examination. These notes are carefully created by experts and hence have all the information that one might need to gain in-depth knowledge on the subject.

After knowing the profit and loss definition along with the other financial statement, it is time for students to know some other terms such as financial reporting. When it comes to financial reporting meaning, it can be defined as the way that helps the company in making certain reports of the financial conditions in the best way.

What is an Expenditure Statement Definition?

The Expenditure Statement is basically a statement that can help in determining the expenditure which is done by a business, company, person, or corporation.

FAQs on Financial Statements

1. What are The Different Features of Financial Statements?

Ans. There are three different features of financial statements and these features are named as:

  • Balance Sheet or Position Statement.

  • Cash flow Statement.

  • Profit and loss statement or Income Statement.

More information about it can be found in the financial statement meaning notes.

2. What is a Profit and Loss Account?

Ans. The profit and loss account definition can be given as the statement which decides the different revenues of the company and the expenses that it has gone through.

3. What is a Balance Sheet?

Ans. A balance sheet is a compilation of all the balances in the ledger of the company for a certain period of time. Students can refer to the balance sheet definition provided in our notes to gain more information on balance sheet meaning.

Our notes on financial statements and the different features incorporating these are extremely well-written and hence can be trusted enough to be reliable when it comes to scoring good marks in the upcoming examinations. Have a look at these notes right now.